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PUBLISHED  QUARTERLY   BY  THE 
AMERICAN  ASSOCIATION  FOR  LABOR  LEGISLATION 

!;•  EteiT  23d  STREET,  Nl'.W         '•       :. 

S    f)JBCO?r»~C3-Ab6   MATJ'BB   FEBEtr.U5Y    20,  1911,  AT  THB    J>O»T  O7J-TC  V  , 

?1  D»  AcrorsT  24,  1912.     ACCEPTANCE  ?OP  MAIUINO  AT 

VO-B  IN  SKOTION  1103,  .ACT  cv.0fcjfa?tn  3,  ?91",  ATTTHO-  -/.ro  • 


AMERICAN  LABOR  LEGISLATION  REVIEW 
Vol.  XI,  No.  3 


The  American 

Labor  Legislation  Review 

JOHN  B.  ANDREWS,  Editor  FREDERICK  W.  MACKENZIE,  Associate  Editor 

Vol.  XI  SEPTEMBER,  1921  No.  3 

CONTENTS 

Legislative  Notes 183 

Unemployment  Survey — 1920-21 — with  Standard  Recommen- 
dations    191 

Introductory  Summary 191 

Extent  of  Unemployment 194 

Distress  Not  as  Acute  in  Winter  of  1920-21  as  in  1914-15 196 

"Living  Off  Their  Fat" 197 

Organization  for  Temporary  Relief 200 

"Work  Tests"  and  Relief  Jobs 203 

Food,  Clothing,  Shelter,  Money  and  Loans 205 

Public  Employment  Bureaus 205 

Public  Works 207 

Part  Time  Employment  in  Industry 210 

Wage  Reductions 211 

Regularization  of  Industry 212 

Unemployment  Insurance 213 

Unemployment  Handled  Slightly  Better  in  1920-21 214 

Policies — Good  and  Bad 215 

Standard  Recommendations  for  the  Relief  and  Prevention 

of  Unemployment 218 

State  Legislation  to  Plan  Public  Works  Against 

Unemployment 220 

The  Need  of  Legal  Standards  of  Protection  for 

Labor JOHN  A.  RYAN     ....  221 

Face  the  Labor  Issue THOMAS  L.  CHADBOUKNE  227 

Report  of  Investigation  into  the  Operation  of  the 

British  Health  Insurance  Act  .  233 


The  AMERICAN  LABOR  LEGISLATION  REVIEW  is  published  quarterly  by  the 
American  Association  for  Labor  Legislation,  131  East  23rd  St.,  New  York, 
N.  Y.  For  contents  of  preceding  issues  see  Publications  list  at  back  of 
volume.  The  price  is  $1  a  single  copy,  or  $3  a  year  in  advance.  Annual 
subscription  includes  individual  membership  in  the  Association. 


"Comes  None  Too  Soon" 

From  an  Editorial  in  the  Nev>  York  "Globe",  August  29,  1921 


« DRESIDENT  HARDING'S  unemployment  conference,  announced 
*  by  Secretary  Hoover,  comes  none  too  soon.  It  is  amazing  that  the 
greatest  industrial  nation  should  have  muddled  through  months  of  economic 
distress  without  apparently  once  having  taken  thought  of  remedies.  For 
a  full  year  the  period  of  depression  has  been  developing.  During  that 
time  unemployment  has  increased  in  severity.  Between  five  and  six 
million  people  who  were  wage-earners  two  years  ago  are  estimated  now 
to  be  jobless.  A  condition  such  as  that  is  fraught  with  peril  for  every 
class  of  citizens.  *  *  * 

"The  leaders  of  industry  whom  Secretary  Hoover  announces  will  be 
called  to  Washington  should  be  able  to  contribute  wisdom.  Industries  are 
suffering  in  varying  degrees  from  the  depression,  and  within  a  single 
industry  individual  businesses  are  not  affected  alike.  Very  exceptional 
manufacturers  have  passed  through  this  crisis  without  difficulty.  Others, 
a  minority  when  the  country  is  taken  as  a  whole,  have  put  plans  into 
operation  for  the  relief  of  the  needs  of  their  unemployed  workers.  What 
the  most  intelligent  employers  have  done  upon  their  own 
initiative  ought  to  be  made  available  for  the  entire  country. 

"But  responsibility  for  counteracting  the  tendency  toward  unemploy- 
ment is  a  public  as  well  as  a  private  obligation.  Every  modern 
industrial  country  is  in  advance  of  the  United  States  in  this  matter.  If 
unemployment  were  the  sole  test  of  our  civilization  America  would  in- 
evitably be  rated  a  backward  nation.  Public  works  ought  to  have  been 
begun  when  private  demand  decreased.  A  series  of  employment  ex- 
changes ought  to  have  been  in  existence.  Congress,  with  amazing  blind- 
ness, ordered  most  of  the  federal  employment  offices  shut  when  hard 
times  loomed  upon  the  horizon.  That  act  was  as  wise  as  it  would  be  to 
close  up  the  hospitals  at  a  time  of  epidemic.  *  *  *  It  is  possible 
now  to  do  something  to  alleviate  the  distress  which  has  been  so  general. 
Two  years  ago,  or  even  a  year  ago,  had  such  a  conference  been  prac- 
tical, the  opportunity  would  frankly  have  been  greater.  The  past,  how- 
ever, cannot  be  retrieved." 


INTRODUCTORY  NOTE 

T  T  NEMPLOYMENT  is  the  immediate  issue.  How  to  combat  distress 
^J  resulting  from  the  long-continued  idleness  of  millions  of  workers 
and  how  to  check  the  continued  increase  of  the  army  of  unemployed  are 
questions  that  temporarily  overshadow  all  other  measures  for  the  protection 
of  labor. 

With  the  announcement  on  August  28  by  Secretary  Hoover  that  the 
President  will  call  a  National  Conference  on  Unemployment  soon,  the 
United  States  makes  its  first  move  toward  organizing  against  existing  un- 
employment on  an  adequate  scale,  following  similar  official  activity  recently 
under  way  in  Canada.  Significantly,  in  naming  the  objects  of  the  Confer- 
ence, the  announcement  gives  recognition  to  industry's  responsibility  by 
stressing  the  need  of  recommendation  for  "measures  that  can  properly  be 
taken  in  co-ordinating  speeding  up  of  employment  by  industries  and  public 
bodies  during  the  next  winter.'* 

This  official  action  is  encouraging.  For  one  thing  it  marks  the  end 
of  a  "do  nothing"  attitude  that  has  been  distressingly  persistent  during  the 
past  twelve-month.  Congress  has  done  nothing.  The  states  have  done 
little  more.  Many  cities  have  taken  hold  but  have  still  failed  to  organize 
on  a  basis  at  all  commensurate  with  the  need.  Industry,  though  averting 
a  vast  amount  of  additional  complete  unemployment  by  going  on  a  part 
time  basis,  is  nevertheless  confronted  by  millions  of  idle  men. 

"Where  IS  the  unemployment?"  is  a  question  that  has  been  heard 
frequently.  When  on  November  8  of  last  year  the  Association  for  Labor 
Legislation  in  a  public  statement  declared  that  **a  period  of  widespread 
unemployment  has  arrived"  and  appealed  for  "immediate,  concerted 
efforts"  to  combat  its  consequences,  certain  attempts  were  made  to  discount 
this  estimate  of  the  seriousness  of  the  situation.  Throughout  the  Winter 
of  1920-21  and  until  quite  recently  there  appeared  to  be,  in  official  and 
in  many  business  quarters,  a  skeptical  or  indifferent  attitude  which  stood  in 
the  way  of  properly  organized  effort  to  combat  unemployment  now 
belatedly  recognized  as  an  urgent  need. 

During  the  present  Summer  this  Association  made — under  the  imme- 
diate direction  of  Frederick  W.  MacKenzie — a  brief  survey  of  unemploy- 
ment in  1920-21.  It  covered  the  same  1  15  cities  that  were  drawn  upon 
in  our  comprehensive  survey  of  unemployment  in  1914-15.  The  results 
of  this  second  inquiry  are  summarized  in  this  number  of  the  REVIEW;  as 


of  aid  not  only  in  understanding  what  has  happened  thus  far  in  the  existing 
depression  but,  more  important,  what  effort  has  been  made  among  industrial 
communities  to  fight  off  the  evil  results  of  enforced  idleness.  It  is  to  be 
especially  noted  that  the  "Standard  Recommendations  for  the  Relief  and 
Prevention  of  Unemployment"  (see  pages  218-19  of  this  REVIEW) 
formulated  by  this  Association,  with  the  cooperation  of  300  local  organi- 
zations, after  the  survey  of  1915  and  re-issued  in  pamphlet  form  at  the 
beginning  of  the  existing  depression,  have  been  found  in  use  wherever  head- 
way is  being  made  against  acute  distress,  many  cities  specifically  reaffirming 
the  effectiveness  of  the  recommendations  out  of  their  recent  experience. 

It  is  now  too  late,  as  the  survey  shows,  to  exercise  foresight — the 
cardinal  principle  of  a  constructive  program  in  warding  off  unemployment. 
The  unemployed  are  here.  The  "roof  cannot  be  mended  in  fair  weather" 
against  the  rain  that  is  falling.  Now,  once  more,  it  is  imperative  to  adopt 
large  measures  of  relief.  Cities  must  bear  the  brunt  of  the  relief  burden — 
and  the  sum  of  their  best  collective  experience  is  that  the  adoption  of  the 
"Standard  Recommendations"  is  the  most  certain  and  effective  means  of 
organizing  themselves  to  overcome  the  worst  results  of  involuntary  unem- 
ployment. The  states  can  help  by  arranging  their  road  building  and  other 
public  improvements  so  as  to  fit  in  with  the  most  pressing  needs  of  the  un- 
employed. Meanwhile,  the  forthcoming  President's  Conference  will  make 
a  great  and  lasting  contribution  to  the  solution  of  the  unemployment  problem 
if  it  stirs  industry  throughout  the  nation  to  a  realization  of  its  responsibility 
for  adopting  practical  plans  for  preventing  unemployment. 

Acute  distress  in  the  Winter  of  1920-21  was  averted,  as  the  unem- 
ployment survey  shows,  largely  because  of  the  unprecedented  extent  to 
which  the  unemployed  wage-earners  have  been  able  to  take  care  of  them- 
selves out  of  savings  acquired  during  the  war  years.  Such  self-assistance 
cannot  be  counted  upon  next  Winter.  The  workers'  savings  are  rapidly 
nearing  exhaustion.  Industry  and  the  public  must  now  consciously  take  up 
the  responsibility  of  providing  subsistence  for  these  unemployed  where  they 
have  been  forced  to  lay  it  down. 

JOHN  B.  ANDREWS,  Secretary, 
American  Association  for  Labor  Legislation. 


Legislative    Notes 


FOLLOWING  a  favorable  report  by  the  judiciary  committee,  the  United 
States  Senate  on  June  10,  by  a  vote  of  75  to  4,  passed  the  Johnson-Mills 
bill,  as  prepared  by  the  Association  for  Labor  Legislation,  to  restore 
the  protection  of  state  workmen's  compensation  laws  to  injured  long- 
shoremen and  other  harbor  workers. 

O 

COMMENTING  on  the  failure  of  the  Wisconsin  legislature  to  pass  a 
strongly  supported  bill  for  unemployment  compensation,  after  it  had 
received  a  favorable  committee  report  in  the  Senate,  the  conservative 
Wisconsin  State  Journal  says:  "Defeat  of  the  Huber  unemployment 
measure  is  a  bit  of  history  that  may  be  reviewed  with  regret  at  a  later 
date.  *  *  *  We  are  probably  nearing  a  time  in  which  society  will 
discountenance  a  system  under  which  men  willing  and  able  to  work 
must  suffer  with  their  families  because  of  unemployment.  We  are  an 
industrial  nation." 

O 

PROPOSALS  for  a  uniform  international  system  of  unemployment 
records  have  been  approved  by  the  governing  body  of  the  International 
Labor  Office,  as  recommended  by  a  subsidiary  commission.  The  com- 
mission recommended  that  the  following  definition  of  involuntary  unem- 
ployment should  be  submitted  to  the  governments  of  Member  states: 
"Unemployment  may  be  defined  as  the  condition  of  a  worker  who  is 
both  able  and  willing  to  work  but  is  unable  to  find  employment  suitable 
to  his  qualifications  and  reasonable  expectations."  It  was  also  agreed 
that  the  governments  should  be  approached  with  regard  to  the  drafting 
of  standard  and  uniform  tables  for  the  presentation  periodically  of 
statistics  of  employment,  compiled  by  trade  unions  and  employment 
agencies  and  of  statistics  of  unemployment  insurance. 

O 

NEW  HAMPSHIRE  has  enacted  a  law  for  maternity  protection,  follow- 
ing the  bill  for  state  action  prepared  by  the  Association  for  Labor 
Legislation. 

O 

BY  a  vote  of  63  to  7,  the  United  States  Senate  on  July  22  passed  the 
Sheppard-Towner  bill  for  maternity  protection.  The  measure,  which 
had  already  passed  in  the  Senate  last  December,  is  now  pending  before 
a  committee  of  the  House,  but  was  not  reported  out  before  the  recess. 
The  principal  change  made  by  the  Senate  was  a  provision  that  prevents 
officials  from  entering  any  home  to  carry  out  the  purposes  of  the  law. 


184  American  Labor  Legislation  Review 

ON  June  11  the  Supreme  Court  of  Utah  sustained  the  constitutionality 
of  the  rehabilitation  provision  of  the  compensation  law  by  which,  in 
fatal  cases  where  there  are  no  dependents,  $750  is  placed  in  a  special 
fund  for  the  compensation  of  employees  who  by  a  combination  of  suc- 
cessive injuries  have  become  permanently  and  totally  disabled,  but  would 
otherwise  receive  compensation  only  for  the  latest  injury. 

O 

A  SIMILAR  provision  in  the  New  York  law,  by  which  $900  is  placed 
in  a  special  fund  for  vocational  retraining  whenever  a  killed  workman 
leaves  no  dependents,  was  recently  upheld  by  the  highest  court  in  the 
state. 

O 

IN  New  Jersey,  however,  the  provision  of  the  workmen's  compensa- 
tion law  requiring  $400  to  be  placed  in  a  special  fund,  when  there  are 
no  dependents  of  the  killed  worker,  has  been  held  unconstitutional  by 
the  court  of  errors  and  appeals.  In  New  Jersey,  it  is  to  be  noted,  the 
money  thus  turned  into  the  state  treasury  was  used  merely  for  general 
administrative  purposes  of  the  labor  department. 

O 

LEGISLATION  has  been  enacted  by  Belgium  putting  into  effect  the 
eight-hour  day  and  the  forty-eight  hour  week,  in  accordance  with  the 
Draft  Convention  adopted  by  the  first  international  labor  conference  of 
the  League  of  Nations,  held  at  Washington  in  1919.  In  ratifying  the 
act  the  King  urged  greater  production  on  the  part  of  workers  and  new 
methods  on  the  part  of  employers  to  sustain  exports,  since  the  country 
can  only  support  one-third  of  its  population,  the  remaining  two-thirds 
depending  on  industry  and  commerce. 

O 

"THE  act  creating  the  Court  of  Industrial  Relations  is  a  reasonable 
and  valid  exercise  of  the  police  power  of  the  state  over  the  business  of 
producing  coal,"  says  a  unanimous  decision  of  the  Supreme  Court  of 
Kansas,  June  11.  The  law  was  held  valid  on  each  of  the  eight  issues 
raised  in  the  contempt  case  against  the  president  of  the  Kansas  miners' 
union. 

O 

FOLLOWING  a  decision  of  the  United  States  Supreme  Court,  last 
December,  holding  that  Ohio  employers  carrying  their  own  risks  under 
the  workmen's  compensation  act  could  not  continue  to  reinsure  against 
the  results  of  industrial  accidents  through  liability  insurance  companies, 
the  state  industrial  commission  has  issued  an  order  which  compels  600 
big  employers  to  cancel  their  reinsurance  contracts.  They  may  insure 
at  cost  directly  in  the  exclusive  state  insurance  fund.  Two  hundred 
employers  who  are  able  to  carry  their  own  risks,  but  do  not  reinsure 
with  commercial  companies,  are  not  affected  by  the  order. 

O 

CONDITIONS  of  unemployment  expected  on  the  completion  of  the  sugar 
harvest  could  be  met  in  part  by  giving  idle  men  a  chance  to  work  on 


Legislative  Notes  185 

central  highways,  construction  of  which  is  planned  in  four  provinces, 
said  Dr.  Alfredo  Zayas  in  an  address  shortly  before  entering  upon  his 
duties  as  president  of  Cuba. 

O 

DRAFT  of  a  bill  for  workmen's  health  insurance  in  Spain,  according 
to  a  recent  despatch,  is  being  prepared  by  the  minister  of  labor. 

O 

AFTER  the  governor  of  Ohio  had  signed  the  law  of  1921  extending  the 
workmen's  compensation  act  to  include  fifteen  specified  occupational 
diseases,  to  go  into  effect  August  15,  it  was  discovered  that  no  appro- 
priation was  provided  to  put  the  law  into  effect.  Before  the  legislature 
adjourned,  however,  an  attempt  was  made  to  secure  $125,000  for  this 
purpose,  but  this  amount  was  cut  to  $25,000  by  the  legislature. 

O 

THE  criminal  syndicalism  act  of  Montana  has  been  declared  uncon- 
stitutional by  a  district  court. 

O 

FOLLOWING  an  appeal  by  the  commissioner  of  public  welfare,  the 
mayor  of  New  York  City  appointed  a  special  committee  on  unemploy- 
ment, including  the  commissioner  and  representatives  of  labor  and  the 
American  Legion,  to  suggest  plans  for  combating  distress  among  the 
jobless  which  is  becoming  increasingly  serious.  Figures  given  out  by 
the  superintendent  of  the  municipal  lodging  house  show  that  applicants 
for  relief  at  the  institution  have  increased  ten-fold  in  a  year. 

O 

INTERNATIONAL  labor  agreements  have  been  entered  into  between  Belgium 
and  Holland  whereby  workers  of  both  countries  will  have  reciprocity  of 
treatment  in  regard  to  compensation  for  industrial  accidents  and  the  advan- 
tages of  social  insurance.  An  agreement  has  also  been  made  with  Bel- 
gium by  France,  guaranteeing  to  workers  of  both  countries  who  work 
in  French  or  Belgian  mines  the  workers'  pensions  in  force  in  each  of  these 
countries. 

O 

MANY  of  the  larger  industries  of  Oregon  have  already  applied  for 
the  5  per  cent  reduction  in  insurance  rates  under  the  workmen's  com- 
pensation act,  effective  July  1,  as  provided  by  the  1921  legislature  for 
compliance  by  employers  with  state  requirements  of  safety  education 
and  accident  prevention. 

O 

IN  reaffirming  his  support  of  the  Sheppard-Towner  bill  for  maternity 
protection,  pending  in  Congress,  the  Rev.  John  A.  Ryan  on  June  19 
declared  that  an  article  in  the  Woman  Patriot  had  misrepresented  his 
position  "in  most  unwarranted  and  shameful  fashion."  Adding  that  his 
own  view  is  in  harmony  with  that  formally  expressed  by  the  National 
Catholic  Welfare  Council,  he  said:  "My  favorable  attitude  toward  the 
bill  has  been  somewhat  strengthened  through  my  observation  of  certain 
sinister  influences  and  their  methods  that  are  arrayed  in  active 
opposition." 


186  American  Labor  Legislation  Review 

THE  workmen's  compensation  act  of  1921  in  Arizona,  creating  the 
state  industrial  commission,  has  been  held  unconstitutional  by  the  state 
Supreme  Court.  The  invalidity  of  the  act,  it  was  held,  lies  chiefly  in 
the  section  requiring  the  employee  engaged  in  a  hazardous  occupation 
to  elect  in  advance  of  the  injury  whether  he  shall  avail  himself  of  the 
act.  One  justice  expressed  regret  that  the  language  of  the  constitution, 
as  it  had  already  been  interpreted  by  the  court,  made  impossible  such 
legislation  as  had  been  found  desirable  by  other  states. 

O 

DESPITE  the  decision  of  Federal  Judge  James  E.  Boyd  of  North  Caro- 
lina that  the  federal  child  labor  law  is  unconstitutional — the  second 
decision  by  this  court  against  child  labor  legislation — it  is  reasonable 
to  expect  that  the  United  States  Supreme  Court  will  consistently  uphold 
the  right  of  the  national  government  to  utilize  broadly  the  federal  taxing 
power.  In  so  doing  it  would  merely  be  sanctioning  the  same  method 
for  protecting  children  against  premature  or  excessive  labor  that  has 
already  been  upheld  for  protecting  bankers  against  undue  inflation  of 
the  currency,  dairy  farmers  against  attractively  colored  oleomargerine, 
and  workers  in  the  match  industry  against  phosphorus  poisoning. 


LITTLE  children  at  work  in  a  cotton  mill,  adjoining  golf  links  in  a  section 
of  the  South  where  child  labor  is  especially  notorious,  inspired  this  qua- 
train by  Sarah  Cleghorn  which  must  chafe  the  consciences  of  those  states  that 
still  permit  the  industrial  exploitation  of  childhood: 

The  golf  links  lie  so  near  the  mill 

That  almost  every  day 
The  laboring  children  can  Iwk  out 
And  see  the  men  at  play. 


"!T  is  expected  that  employers  under  state  laws  for  unemployment 
insurance,"  said  Professor  John  R.  Commons  at  the  recent  National 
Conference  of  Social  Work,  "will  organize  their  employment  and  labor 
management  departments  as  effectively  as  they  have  their  safety  depart- 
ments under  the  stimulus  of  workmen's  compensation  laws.  It  is  also 
expected  that  the  liability  incurred  when  a  man  is  laid  off  on  account 
of  lack  of  work  will  prevent  employers  from  over-expanding  with  rush 
orders  and  induce  them  to  spread  out  their  work  more  evenly  through 
the  year.  This  is  based  on  the  actual  experience  of  several  large  manu- 
facturing establishments  in  different  parts  of  the  country  which  have 
done  much  during  the  past  ten  or  fifteen  years  towards  stabilizing 
employment."  Legislation  for  unemployment  insurance  as  advanced  in 
the  United  States,  Professor  Commons  points  out,  avoids  philanthropy 
or  paternalism,  and  is  based  on  the  idea  that  unemployment  can  be 
largely  prevented  by  good  business  management  if  organized  on  the  same 
basis  as  the  safety  and  accident  prevention  work. 


Legislative  Notes  187 

COMPULSORY  health  insurance  legislation  for  all  workers,  without 
regard  to  their  earnings,  has  recently  been  enacted  in  Poland.  The  law 
also  includes  maternity  benefits. 

O 

ELIMINATION  of  commercial  insurance  companies  from  the  workmen's 
compensation  field,  through  the  adoption  of  an  exclusive  state  fund  for 
accident  insurance  modeled  on  the  successful  Ohio  law,  was  given  a 
leading  place  on  the  immediate  legislative  program  of  the  New  York 
State  Federation  of  Labor  at  its  recent  annual  convention. 


RECENT  legislation  on  employment  exchanges  and  unemployment  in- 
surance in  the  Republic  of  Austria  satisfies  the  requirements  of  the 
Washington  Draft  Conventions  on  unemployment,  according  to  an 
article  in  the  official  International  Labour  Review  for  May-June,  1921.  It 
should  also  be  noted  that  reciprocal  agreements  on  unemployment 
benefits  have  been  concluded  between  Austria  and  Czecho-Slovakia  and 
Germany  providing  for  the  like  treatment  of  their  respective  citizens, 
and  a  similar  agreement  is  about  to  be  concluded  with  Switzerland. 


AMBULANCE-CHASING  lawyers  are  campaigning  to  bring  about  the 
defeat  of  the  Missouri  workmen's  compensation  law  of  1921.  Opponents 
of  the  act  have  filed  sufficient  petitions  to  invoke  the  referendum  in  the 
1922  election.  Meanwhile  the  operation  of  the  law  is  suspended. 


IN  calling  for  the  prompt  passage  of  the  Jones-Fitzgerald  bill  drafted 
by  the  Association  for  Labor  Legislation  and  now  pending  in  Congress 
to  provide  workmen's  compensation  for  private  employees  in  the  District 
of  Columbia,  a  resolution  adopted  at  the  recent  convention  of  the  Ameri- 
can Federation  of  Labor  strongly  demands  the  adoption  of  the  exclusive 
state  fund  plan  of  insurance.  "The  American  Federation  of  Labor," 
says  the  resolution,  "reaffirms  its  conviction  based  on  years  of  practical 
experience  that  exclusive  fund  insurance  and  the  elimination  of  private 
profit  in  workmen's  accident  compensation  is  advantageous  to  wage 
workers,  and  urges  the  early  enactment  of  the  Jones-Fitzgerald  District 
of  Columbia  workmen's  compensation  bill  without  change  from  the 
exclusive  fund  plan.  *  *  *  Private  employees  in  the  District  of 
Columbia  are  wholly  without  the  protection  of  a  workmen's  accident 
compensation  law  or  even  an  employers'  liability  statute,"  the  resolution 
declares.  "The  American  Federation  of  Labor  has  repeatedly  appealed 
for  the  elimination  of  private  profit  in  the  operation  of  workmen's  com- 
pensation laws,  and  at  its  Montreal  convention  endorsed  the  Ohio  work- 
men's compensation  insurance  plan.  Our  representatives  have  accord- 
ingly given  their  support  to  the  Jones-Fitzgerald  bill  modeled  on  the 
Ohio  system." 


188  American  Labor  Legislation  Review 

As  an  aid  in  relieving  unemployment,  a  resolution  adopted  at  the 
recent  convention  of  the  American  Federation  of  Labor  instructs  all 
state  federations  of  labor  and  central  labor  bodies  to  urge  state,  county 
and  city  governments  "to  immediately  make  provision  to  carry  on  such 
public  works  as  they  now  may  have  under  consideration." 


"EXPERIENCE  has  clearly  demonstrated  that  the  industrial  accident  fund 
can  take  care  of  itself;  that  it  is  absolutely  self-supporting,"  declares 
the  fifth  annual  report  of  the  Wyoming  Workmen's  Compensation 
Department  prepared  under  the  direction  of  the  state  treasurer.  Begin- 
ning six  years  ago  with  an  appropriation  of  $30,000  from  the  state  as  a 
nucleus,  the  state  fund  established  to  provide  accident  insurance  at 
actual  cost  is  now  in  a  position  to  go  "on  its  own,"  according  to  the 
report.  The  department  recommends  that  the  original  $30,000  together 
with  all  other  sums  since  advanced  by  the  state,  amounting  to  $228,817, 
be  returned  to  the  state's  general  fund.  The  favorable  showing  of  the 
Wyoming  state  fund  and  the  compensation  department's  recommenda- 
tion follows  similar  action  in  Pennsylvania  where  the  state  accident 
insurance  fund  recently  paid  back  to  the  commonwealth  in  full  its 
original  investment  of  $500,000. 

O 

A  PROCLAMATION  issued  by  the  executive  council  of  the  American  Federa- 
tion of  Labor,  August  25,  declaring  that  unemployment  is  "approaching 
a  dangerous  crisis,"  calls  upon  the  federal  and  the  state  governments  to 
assist  in  fighting  unemployment  by  "immediately  concerning  themselves 
with  putting  into  operation  processes  of  production  for  public  improve- 
ments of  buildings,  roads,  etc.,  and  to  use  the  credit  of  the  country  for 
the  encouragement  of  productive  processes." 

O 

IN  Racine,  Wis.,  and  Hartford,  Conn.,  measures  were  undertaken  during 
the  summer  to  relieve  unemployment  that  have  received  wide  publicity. 
Racine  bankers  took  up  a  city  bond  issue  of  $150,000  to  be  used  in  pro- 
viding city  improvement  jobs  to  the  unemployed.  In  Hartford  the  city 
appropriated  $10,000  a  month  for  extra  city  work  for  which  selected 
unemployed  workers  are  hired  for  five-hour  daily  shifts  at  40  cents  an 
hour. 

O 

THE  resignation  of  Miss  Julia  Lathrop  as  chief  of  the  federal  Chil- 
dren's Bureau  was  accepted  August  19  by  the  Secretary  of  Labor  in  a 
letter  in  which  he  expressed  regret  at  her  retirement  and  appreciation 
of  her  "conscientious  and  devoted  service."  To  Miss  Lathrop,  the 
Secretary  wrote,  "is  due  the  great  credit  of  building  up  the  Children's 
Bureau,"  and  he  adds  "what  a  wonderful  work  you  have  accomplished. 
*  *  *  It  does  not  seem  that  any  one  can  really  fill  the  place  that  you 
are  leaving." 


Legislative  Notes  189 

PRESIDENT  HARDING  has  appointed  Miss  Grace  Abbott  of  Grand  Island, 
Neb.,  to  succeed  Miss  Lathrop  as  chief  of  the  Children's  Bureau. 

O 

CANADA  is  organizing  on  a  national  scale,  in  advance  of  the  coming  winter, 
to  combat  unemployment.  The  request  of  Minister  of  Labor  G.  D. 
Robertson  that  provincial  officials  call  conferences  of  all  interested  in 
relieving  unemployment  is  being  well  received  throughout  the  Dominion, 
according  to  a  recent  dispatch.  Ontario  and  Alberta  have  already  called 
conferences  and  Manitoba  is  arranging  for  a  meeting  at  Winnipeg.  At 
a  conference  in  Vancouver,  August  10,  fifty  representative  employers 
met  with  officials  of  the  cities  in  the  province  to  work  out  a  program 
whereby  industry  would  assist  in  providing  jobs  for  the  unemployed. 
It  is  expected  that  a  national  conference  will  be  held,  after  the  provincial 
gatherings  have  completed  their  work,  to  consider  plans  for  aiding  the 
jobless  on  a  big  scale. 

<> 

"WHAT  the  able  veteran,  out  of  a  job  and  destitute,  needs  is  work,"  declares 
an  editorial  in  the  Chicago  Tribune,  August  4.  "We  do  not  know  how  many 
of  the  4,000,000  soldiers  are  walking  the  streets  without  money  to  get 
their  meals  or  to  support  their  families,  but  there  are  thousands  of  them, 
probably  hundreds  of  thousands.  *  *  *  The  veterans  are  entitled 
either  to  work  by  which  they  may  support  themselves,  or  to  protection 
and  insurance  against  unemployment.  Protection  is  not  charity.  It  is 
a  social  handling  of  a  national  question.  *  *  *  Every  soldier  who 
served  honorably  in  the  late  war  who  can't  get  work  today  should  receive 
OUT  OF  WORK  COMPENSATION  from  the  government." 

O 

SECRETARY  HOOVER,  in  a  letter  to  the  governors,  July  28,  urged  state  action 
to  forestall  unemployment  distress  during  the  coming  winter,  by  letting 
contracts  for  road  building  in  the  autumn,  wherever  practicable,  instead 
of  waiting  until  next  spring. 

O 

GROWING  interest  in  unemployment  insurance  among  employers  in  the 
United  States  is  reflected  in  a  recent  issue  of  the  New  York  Times'  Annalist. 
Referring  to  the  wide  extension  of  the  unemployment  insurance  act  of 
Great  Britain,  effective  November  8,  the  article  says:  "Its  extension  is 
proof  that  it  has  demonstrated  its  practicability  and  value."  And  it 
points  out  that  the  trend  toward  unemployment  insurance  is  likely  to 
run  along  the  same  lines  as  the  movement  for  compulsory  accident 
insurance,  now  an  accepted  feature  of  industry,  but  which,  for  years 
before  its  adoption,  was  violently  opposed  by  employers. 

O 

G.  V.  M.  TURNER,  member  of  the  staff  of  the  New  South  Wales  Board 
of  Trade,  has  written  a  brief  survey  (71  pages)  of  unemployment  insur- 
ance, published  by  the  government. 


190  American  Labor  Legislation  Review 

THIRTY  states  have  enacted  legislation  accepting  the  provisions  of  the 
federal  act  for  the  vocational  rehabilitation  of  industrial  cripples.  They 
include  Alabama,  Arizona,  California,  Georgia,  Idaho,  Illinois,  Indiana, 
Iowa,  Maine,  Massachusetts,  Michigan,  Minnesota,  Missouri,  Montana, 
Nebraska,  Nevada,  New  Jersey,  New  Mexico,  New  York,  North  Caro- 
lina, North  Dakota,  Oregon,  Pennsylvania,  Rhode  Island,  South  Dakota, 
Tennessee,  Utah,  West  Virginia,  Wisconsin  and  Wyoming. 

O 

IN  THREE  special  articles  in  the  Journal  of  the  American  Medical  Associa- 
tion (Chicago)  of  May  7,  14  and  21,  Dr.  Alfred  Cox,  medical  secretary, 
British  Medical  Association,  makes  a  valuable,  authoritative  contribu- 
tion to  the  literature  of  Health  Insurance  in  England. 

O 

A  RECENT  social  survey  of  Prague,  reported  comprehensively  in  the  Survey 
for  June  11,  1921,  makes  the  following  findings  with  respect  to  protective 
laws  for  labor:  "In  labor  legislation  for  the  protection  of  women  and 
minors  and  for  the  protection  of  all  workers,  the  new  republic  of  Czecho- 
slovakia takes  a  high  rank  among  the  nations.  Social  insurance  pro- 
viding for  sickness,  maternity,  accident,  unemployment,  old  age  and 
invalidity;  regulation  of  hours,  child  welfare,  safety,  sanitation  and 
health  and  minimum  wage  had  been  subject  to  new  legislation." 

O 

A  COMPREHENSIVE  system  of  public  labor  exchanges  has  recenly  been  created 
by  royal  order  in  Spain.  State  subsidies  are  provided  to  encourage  the 
establishment  of  employment  bureaus  and  exchanges  by  town  councils 
and  other  provincial  and  local  institutions.  In  order  to  secure  the 
financial  aid  from  the  royal  government,  local  labor  exchanges  must 
fulfil  several  conditions  including  management  of  the  exchange  by  a 
board  composed  equally  of  representatives  of  employers  and  workers 
advised  by  experts  on  social  questions. 

O 

A  BILL  to  ratify  the  Draft  Convention  adopted  at  the  Washington  meeting 
of  the  International  Labor  Conference  of  the  League  of  Nations,  pro- 
viding for  a  national  system  of  public  employment  agencies  and  unem- 
ployment insurance,  has  been  prepared  by  the  government  and  advanced 
well  on  the  way  to  adoption  in  Czecho- Slovakia.  Similar  steps  have 
already  been  taken — as  noted  in  these  pages  for  December,  1920,  looking 
to  the  ratification  of  other  Draft  Conventions  agreed  upon  at  the  Wash- 
ington conference.  In  addition,  the  government  of  Czecho-Slovakia  has 
proposed  to  the  national  assembly  that  measures  be  taken  to  adhere  to 
the  Berne  Convention  of  1906  prohibiting  the  use  of  poisonous  phos- 
phorus in  the  match-making  industry,  as  well  as  to  protect  the  workers 
against  anthrax  and  lead  poisoning. 


Unemployment  Survey— 1920-21 

with 
Standard  Recommendations 


Introductory  Summary 

T  TNEMPLOYMENT  in  the  Winter  of  1920-21,  although  twice 
^  as  great  in  extent — according  to  highest  official  estimates — 
as  during  the  previous  depression  of  1914-15,  was  accompanied  by 
far  less  acute  distress. 

The  outstanding  reason  given  for  this  was  the  unprecedented 
degree  to  which  unemployed  workers  tided  themselves  and  their 
families  over  the  first  few  months  of  idleness.  By  using  up  their 
savings  and  selling  their  Liberty  Bonds,  and  to  a  less  extent  dispos- 
ing of  automobiles,  victrolas,  pianos  and  other  valuables  acquired 
during  the  war  and  post-war  boom — even  in  many  instances  sacri- 
ficing paid- for  or  partly-paid- for  homes — the  unemployed  on  the 
whole  carried  themselves  over  last  Winter's  emergency  for  periods 
ranging  from  three  to  nine  months. 

Charitable  and  relief  organizations,  therefore,  were  to  that 
extent  freed  from  a  burden  that  must  otherwise  have  quickly  over- 
whelmed their  resources — although  reporting  that,  as  it  was,  they 
had  to  expand  their  activities  greatly ;  in  some  cases  toward  Spring 
their  expenditures  for  material  aid  and  temporary  loans  amounting 
to  three  or  four  times  as  much  as  in  previous  years  without  fully 
meeting  the  need  for  relief,  while  in  many  places  it  was  found 
necessary  to  assist  with  charitable  aid  through  city  appropriations. 

Employers  succeeded  in  preventing  a  large  amount  of  complete 
unemployment  by  going  on  a  part  time  basis.  Business  associations 
reporting  from  41  cities  were  almost  unanimous  in  stating  that  the 
short  day  and  the  short  week  were  used  as  a  rule  by  manufacturers 
in  their  effort  to  avert  as  much  joblessness  as  possible.  Shift- 
ing and  rotating  employees,  though  to  a  less  extent,  were  also  used. 
Thefe  was  some  "making  to  stock,"  especially  in  basic  industries, 
despite  the  uncertainty  of  price  trends  in  raw  materials  and  of  the 
buyers'  strike,  and  there  were  also  a  few  attempts  to  utilize  labor 
in  making  plant  repairs  or  improvements.  The  reports  warrant  the 
estimate  that  if  emergency  plans  for  making  available  work  go  as  far 
as  possible  had  not  been  thus  generally  adopted  by  manufacturers 
there  would  have  been  twice  as  many  without  employment. 


192  American  Labor  Legislation  Review 

Public  works  were  found  to  be  effective  for  relief,  serving  as  a 
sponge  to  absorb  jobless  workers.  Out  of  81  cities  sending  in- 
formation, 24  had  by  June  1  provided  bond  issues  and  appropria- 
tions totalling  nearly  $10,000,000  expressly  for  the  purpose  of 
starting  or  pushing  forward  useful  public  works  as  an  aid  to  the 
unemployed — a  significant  showing  in  view  of  the  many  cities 
reporting  a  disposition  to  delay  even  their  regularly-planned  public 
works  pending  cheaper  transportation  and  construction  costs. 
No  city,  however,  had  provided  work  enough  to  take  care  of  all 
who  applied — at  least  half  in  most  cases  being  turned  away.  Direct 
hiring  was  the  rule  on  city  emergency  work,  as  was  also  working 
the  same  hours  and  applying  the  same  standards  of  efficiency  as  is 
required  for  regular  city  employment. 

Cities  generally  had  failed  to  make  any  efforts  to  reserve  neces- 
sary improvements  for  bad  seasons  or  bad  years.  Neither  have  they 
made  any  progress,  the  reports  show,  toward  maintaining  sinking 
funds  to  be  used  in  starting  emergency  work  when  needed. 

Public  employment  bureaus  were  helpful  in  relieving  unemploy- 
ment, most  reports  commending  their  services.  Employers'  asso- 
ciations in  19  out  of  28  cities  reporting  expressed  themselves  as 
favorable  to  the  public  employment  service,  only  5  registering  oppo- 
sition. Some  employers'  bodies  criticized  the  private  fee-charging 
agencies  for,  as  one  expressed  it,  "collecting  exorbitant  fees  on  myth- 
ical jobs."  The  action  of  Congress  a  year  ago  in  radically  curtailing 
the  appropriation  for  the  United  States  Employment  Service  was 
criticized  in  many  reports  which  declared  that  necessary  offices 
had  to  be  closed  and  that  placement  activities  had  thus  been  seriously 
crippled.  In  all  cities  reporting,  where  federal,  state  and  city 
bureaus  were  in  existence,  they  were  found  to  be  in  close  coopera- 
tion not  only  with  each  other  but  also  with  other  agencies — private 
and  public — dealing  with  the  unemployed. 

Community  organization  had  by  June  1  to  a  marked  extent  taken 
the  form  of  emergency  committees  representing  both  public  and 
private  agencies.  In  no  less  than  18  cities  special  unemployment 
committees  appointed  by  mayors,  or  similar  public-private  bodies, 
were  created.  Activities  of  these  groups  ranged  from  specific  cam- 
paigns for  stimulating  emergency  public  works  and  finding  tempo- 
rary jobs  in  private  employment  to  the  more  general  work  of  co- 
ordinating the  efforts  of  all  existing  relief  agencies.  In  14  cities 
where  organized  work  of  emergency  relief  was  confined  to  com- 
mittees of  private  bodies  or  citizens,  it  was  found  that  in  most  cases 


Unemployment  Survey,  1920-21  193 

the  committees  were  formed  to  bring  about  closer  cooperation  be- 
tween existing  relief  agencies. 

Nearly  all  cities  that  had  any  experience  with  the  demoralizing 
results  of  "  pauperization  "  sent  in  warnings  to  "  avoid  bread  lines, 
soup  kitchens,  money  gifts  or  other  indiscriminate  giving  of  charit- 
able relief."  Nine  cities  especially  condemned  the  giving  of  undue 
publicity  to  relief  plans  or  funds. 

Several  states  in  1921,  through  legislation,  expanded  their  sys- 
tems of  state  employment  bureaus,  with  generous  additional  appro- 
priations. One  or  two  authorized  bond  issues  by  cities  for  the 
relief  of  the  unemployed.  Some  made  provision  for  road  construc- 
tion. Unemployment  insurance  bills  were  introduced  with  strong, 
representative  backing  in  two  states,  and  in  Wisconsin  the  bill  was 
advanced  to  a  favorable  committee  report  in  the  Senate.  Two 
states  on  opposite  sides  of  the  continent  furnished  a  striking  con- 
trast: New  York  reorganized  its  labor  department,  on  the  ground 
of  "  economy,"  in  such  a  way  that  a  serious  blow  was  struck  at  the 
state  employment  bureaus,  and  on  the  same  plea  of  "  retrenchment  " 
refused  to  advance  a  resolution  to  create  a  legislative  committee  to 
coordinate  all  plans  for  public  works,  under  way  or  contemplated, 
throughout  the  state  as  a  matter  of  first  aid  to  the  jobless ;  California, 
on  the  other  hand,  enacted  a  comprehensive  law  providing  for  per- 
manent, advance  planning  of  public  works  by  state  departments  so 
that  useful  jobs  may  be  made  available  at  once  whenever  an  unem- 
ployment emergency  sets  in. 

Federal  action,  aside  from  Secretary  Hoover's  appeal  to  the 
states  to  help  by  letting  contracts  for  road  building  in  the  Autumn, 
wherever  practicable,  instead  of  waiting  until  next  Spring,  was  even 
less  in  evidence.  Our  government  suffered  in  this  respect  in  com- 
parison with  Canada,  where  the  government,  already  provided  with 
a  well-organized  national-state  employment  service,  announced  that 
it  will  push  forward  public  works  scheduled  for  next  Summer  so 
that  they  will  be  available  during  the  coming  Winter  to  combat 
unemployment.  Canadian  government  officials,  too,  called  a  con- 
ference at  Vancouver,  August  10,  of  50  representative  employers 
and  government  and  municipal  officials  to  work  out  a  definite  pro- 
gram whereby  industry  would  assist  in  providing  jobs  for  the 
unemployed. 

Looking  immediately  ahead,  reports  from  many  sections  in  the 
United  States  warned  that  cities  must  prepare  for  severe  unem- 
ployment during  the  coming  Winter.  Relief  agencies  not  only 


194  American  Labor  Legislation  Review 

pointed  out  that  the  unemployed  have  exhausted  their  own  savings 
and  valuables  and  cannot  continue  to  help  themselves  as  they  did 
last  Winter,  but  they  also  found  that  unemployment  has  been  increas- 
ing faster  than  community  activities  have  been  planned  to  combat  it. 
While  an  encouraging  number  of  cities,  the  reports  show,  have  taken 
measures  to  relieve  the  unemployed,  still  the  great  majority  face  the 
coming  Winter  with  no  program  at  all  or  merely  the  feeble  be- 
ginnings of  constructive  relief.  The  opinion  is  widely  held  that 
unless  the  industrial  cities  promptly  "  dig  in "  unemployment  in 
many  sections  will  become  unmanageable  with  the  advent  of  cold 
weather. 

Definite  conclusions  as  to  the  proper  measures  for  combatting 
unemployment  were  forthcoming  out  of  the  experiences  of  66  cities. 
Of  these,  23  laid  stress  upon  expansion  of  public  works  as  the  most 
successful  measure  within  their  experience;  16  emphasized  tempo- 
rary jobs  and  the  giving  of  material  relief,  where  necessary,  only 
when  earned;  15  regarded  proper  community  organization,  includ- 
ing "  mayors'  "  committees  as  a  prime  necessity ;  14  were  especially 
aided  by  the  efforts  of  employers  to  provide  part  time  employment 
by  means  of  the  short  day,  short  week  and  the  "  making  to  stock  " ; 
and  8  secured  notably  good  results  through  public  employment 
bureaus. 

On  the  whole  reports  indicate  that  many  of  the  lessons  of  1914-15 
had  been  taken  to  heart.  Many  cities,  out  of  the  most  recent  experi- 
ence, specifically  reaffirmed  the  effectiveness  of  the  "  STANDARD 
RECOMMENDATIONS  FOR  THE  RELIEF  AND  PREVENTION  OF  UNEM- 
PLOYMENT "*  issued  by  the  American  Association  for  Labor  Legisla- 
tion after  a  similar  survey  of  unemployment  in  1915,  declaring  that 
where  adapted  to  local  conditions  they  have  proved  most  successful. 

Extent  of  Unemployment 

Unemployment  in  1920-21  has  been  far  greater  in  extent  than 
in  1914-15.  Six  years  ago  the  total  number  of  workers  forced  into 
involuntary  idleness  was  estimated  at  2,000,000,  with  at  least  as 
many  more  on  only  part  time  employment.  In  the  present  industrial 
depression  there  were,  by  June  1,  1921,  according  to  the  highest 
official  estimates,  4,000,000  employees  idle  and  at  least  as  many  more 
on  part  time. 

1  See  pages  218  and  219,  infra.;  also  American  Labor  Legislation  Review, 
Vol.  V,  No.  3,  September,  1915,  which  contains  a  comprehensive,  illustrated 
report  of  the  "  Unemployment  Survey,  1914-15." 


Unemployment  Survey,  1920-21  195 

About  October,  1920,  unemployment  began  to  set  in  on  an 
unmistakably  large  scale.  On  December  9  the  United  States  De- 
partment of  Labor  announced  that  what  is  left  of  the  Federal  Em- 
ployment Service  would  undertake  to  gather  statistics  of  unemploy- 
ment for  the  entire  country,  in  co-operation  with  other  federal  and 
state  agencies,  the  figures  to  be  published  at  regular  intervals.  In 
accordance  with  this  new  plan  the  first  number  of  the  Industrial 
Employment  Survey  Bulletin  was  published  by  the  United  States 
Employment  Service  in  January,  1921 ;  the  second  number  appeared 
in  March,  and  later  the  Bulletin  appeared  monthly. 

On  January  25,  1921,  according  to  the  official  government  figures 
based  on  data  from  182  principal  industrial  cities  in  35  states  and 
the  District  of  Columbia,  there  were  3,500,000  fewer  workers  em- 
ployed in  the  mechanical  industries  covered  than  in  January,  1920 — 
a  reduction  of  36.9  per  cent.  The  official  figures  fall  short  of  dis- 
closing the  actual  extent  of  unemployment  in  that  they  do  not  take 
into  account  the  great  railroad  and  mining  groups  and  the  smaller 
firms  throughout  the  country  employing  less  than  501  workers.  In 
eight  basic  industrial  groups  the  degree  of  unemployment  in  Jan- 
uary, 1921,  as  compared  with  January,  1920,  according  to  the  official 
estimate,  was  as  follows :  Metal  and  products,  machinery,  electrical 
goods,  foundry  products,  30.5  per  cent  fewer  employed;  building 
trades,  52.4  per  cent  fewer  employed;  packing  and  food  products 
19  per  cent  fewer  employed ;  textiles  and  products,  clothing,  hosiery 
and  underwear,  35.5  per  cent  fewer  employed ;  leather,  its  products, 
boots  and  shoes,  34.9  per  cent  fewer  employed ;  automobiles  and  ac- 
cessories, 69.2  per  cent  fewer  employed;  lumber,  house  furniture, 
boxes  and  wood  products,  32.3  per  cent  fewer  employed ;  clay,  glass, 
cement  and  stone  products,  19.3  per  cent  fewer  employed,  which 
meant  that  in  these  great  industries  alone  there  were  on  the  average 
as  high  as  35.5  per  cent  fewer  persons  at  work  than  a  year  previous. 

The  American  Federation  of  Labor,  on  February  28  announced 
that  a  canvass  under  way  by  organized  labor  covering  917  cities  indi- 
cated that  approximately  4,000,000  were  out  of  work. 

On  May  Day  the  Associated  Press  reported  that  estimates  from 
government,  labor,  and  industrial  officials  showed  more  than  2,000,- 
000  men  unemployed  in  19  states — a  large  proportion  of  those  unable 
to  obtain  work  being  in  the  industrial  sections  of  the  Eastern  and 
Central  States — while  reports  from  the  remaining  29  states  indi- 
cated that  the  total  for  the  country  was  between  3,000,000  and  5,000,- 
000  idle  workers.  On  June  1  the  "  survey "  published  by  the 
Guaranty  Trust  Company,  relying  upon  "the  most  reliable  esti- 


196  American  Labor  Legislation  Review 

mates,"  placed  the  number  of  unemployed  at  between  3,000,000  and 
4,000,000.  On  July  22,  the  Wall  Street  Journal  printed  a  Washing- 
ton despatch  quoting  "  unofficial  estimates  by  the  U.  S.  Employ- 
ment Service  of  the  Department  of  Labor"  under  the  heading: 
"  NEARLY  5,000,000  INDUSTRIAL  WORKERS  UNEMPLOYED  JULY  1," 
and  in  August,  the  Secretary  of  Labor  submitted  to  the  United 
States  Senate  the  official  estimate  that  5,750,000  were  unemployed. 

Here  was  an  unemployment  crisis  of  appalling  magnitude.  Fol- 
lowing past  experience  with  these  ever-recurring  depressions — 
particularly  the  crisis  of  six  years  ago — the  way  has  been  opened 
this  time  alarmingly  wide  for  the  quick  appearance  of  acute  distress 
and  destitution  on  a  scale  never  before  known.  Yet  as  winter 
dragged  out  its  course  and  gave  way  to  spring,  the  reports  from  all 
sections,  with  but  few  exceptions,  failed  to  record  drastic  resort  to 
emergency  relief  measures  or  suffering  among  the  families  of  un- 
employed at  all  commensurate  with  the  extent  of  involuntary  idle- 
ness. How  was  this  to  be  explained? 

With  a  view  to  finding  out  what  measures  were  being  taken 
to  combat  unemployment,  the  American  Association  for  Labor  Leg- 
islation during  the  Summer  of  1921  undertook  a  brief  survey  cover- 
ing 115  principal  industrial  centers  of  the  United  States.  Ques- 
tionnaires were  sent  to  the  same  cities  and  the  same  sources  of  infor- 
mation— public  employment  bureaus,  chambers  of  commerce,  labor 
unions,  municipal  departments  of  public  work  and  permanent  relief 
organizations — that  had  co-operated  in  the  comprehensive  unem- 
ployment survey  made  by  this  Association  in  1915,  leading  to  the 
formulation  of  the  "  STANDARD  RECOMMENDATIONS  FOR  THE  RELIEF 
AND  PREVENTION  OF  UNEMPLOYMENT  "  which  have  since  been  much 
discussed,  especially  during  the  past  Winter,  when,  in  leaflet  form, 
they  were  in  great  demand  and  were  distributed  throughout  the 
country  by  the  thousands.  To  facilitate  comparisons,  the  detailed 
part  of  the  1920-21  inquiry  was  confined  to  the  corresponding  six 
months'  period  covered  by  the  1914-15  survey,  that  is,  from  Decem- 
ber 1  to  June  1.  It  was  desired  particularly  to  learn  whether  the 
lessons  of  six  years  ago  had  been  taken  to  heart.  Had  the  industrial 
communities  really  made  progress  toward  dealing  constructively 
with  unemployment? 

Distress  Not  As  Acute  in  Winter  of  1920-21  As  in  1914-15 

Distress  among  unemployed  workers  is  reflected  in  the  calls  upon 
charitable  and  relief  societies  for  temporary  aid.  Yet,  during  the 


Unemployment  Survey,  1920-21  197 

Winter  of  1920-21,  with  4,000,000  out  of  work  as  compared  with  the 
2,000,000  of  1914-15,  only  half  of  the  cities  reporting  were  forced 
to  meet  greater  demands  for  relief  than  six  years  ago. 

Out  of  65  cities,  9  had  "  far  greater  "  demands  for  assistance 
than  in  1914-15,  18  had  "greater"  demands  and  6  found  the  pres- 
sure about  the  same.  Five  cities  had  no  comparative  data,  while  27 
reported  that  the  distress  in  1920-21  was  less  than  in  1914-15. 

In  Rochester  the  Social  Welfare  League  met  a  greater  number 
of  applications  and  heavier  demands  upon  its  finances  because  of 
"  the  high  cost  of  living,  shortage  of  houses,  exorbitant  rents,  unwill- 
ingness of  landlords  to  trust  even  old  tenants  for  any  reasonable 
time  and  inability  of  relatives  to  help  over  such  a  long  period." 
Yonkers,  on  the  other  hand,  had  less  need  for  charitable  relief  be- 
cause "  families  had  amassed  savings  from  higher  wages ;  came  later 
to  ask  for  relief ;  relatives  of  families  in  need  better  able  to  assist, 
due  to  higher  wages."  Philadelphia  reported  "  our  belief  is  that 
the  reason  for  few  applications  for  aid  has  been  due  primarily  to 
savings."  In  Pittsburgh  the  charities  reported  (in  July,  1921) 
that  the  demands  for  relief  were  less  in  1920-21  due  to  "  savings  " 
and  "  credit,"  but  added  significantly  that  "  these  are  becoming  ex- 
hausted and  increasing  numbers  are  coming  to  us." 

"  Living  Off  Their  Fat  " 

An  editorial  article  in  The  Railroad  Trainman  for  August,  1921 
discussing  the  plight  of  the  5,000,000  unemployed,  says : 

During  the  war  it  was  common  practice  to  refer  to  the  spendthrift  tend- 
encies of  the  workmen  who  spent  their  money  like  drunken  sailors.  Silk 
raiment,  high  grade  autos  and  jewelry  were  supposed  in  the  main  to  absorb 
the  extra  wages  of  all  workmen  and  their  families.  That  this  was  not  gen- 
erally true  is  proven  by  the  ability  of  the  unemployed,  for  the  most  part,  to 
take  care  of  themselves.  They  may  be  doing  it  through  the  sale  of  their 
extravagant  purchases  during  the  good  years,  and  their  Liberty  Bonds,  which 
they  can  sell  at  a  decided  reduction  of  their  face  value.  But,  whatever  the 
reason,  the  fact  holds  that  the  unemployed  saved  money  in  some  form  and 
have  been  pretty  generally  able  to  keep  from  asking  for  public  assistance. 
This  very  fact  is  covered  by  the  extent  of  the  suffering  that  must  now  be 
experienced  because  of  the  loss  of  the  regular  wage.  The  public  has  not  been 
asked  to  help  to  any  great  degree,  although  it  is  fair  to  assume  that  the  limit 
of  self -maintenance  has  about  been  reached  in  very  many  cases.  When  it 
comes  to  the  last  ditch  there  will  be  hundreds  of  thousands  of  men  and  women 
who  will  prefer  to  starve  and  suffer  rather  than  to  appeal  for  public  assistance 
The  self-respecting  and  independent,  therefore,  will  not  be  counted  among  the 
out  of  work  and  down  and  out  until  they  are  forced  by  starvation  to  make 
known  their  wants  to  the  public. 


198  American  Labor  Legislation  Review 

That  is  precisely  what  happened.  The  workers  themselves,  by 
"  living  off  their  fat,"  had  up  to  June  1  been  largely  instrumental  in 
averting  general  and  desperate  want. 

As  early  as  November,  1920,  the  Metropolitan  Life  Insurance 
Company,  in  its  Statistical  Bulletin,  said  that  "  despite  popular  mis- 
conception that  wage-earners  spent  their  higher  incomes  in  wasteful 
ways,  the  real  evidence  is  that  much  of  the  increased  income  was 
expended  wisely  in  securing  a  more  wholesome  home  environment. 
Department  store  records  show  that  wage-earners  bought  heavily 
such  useful  goods  as  furniture,  bedding,  carpets  and  other  lines  of 
household   equipment.     *     *     *     Savings   banks   reported   record 
breaking  deposits  from  this  group  of  the  population."     The  New 
York  Journal  for  January  28  reported  that,  "  It  is  interesting  to  note 
that  an  increase  of  $104,500,000  or  27  per  cent  in  savings  was 
reported  by  Chicago  banks  in  1920,  the  heaviest  increase  developing 
after   November   15,   at   which  time  unemployment  began  to  be 
recognized.     These  figures  are  said  to  be  the  result  of  the  public 
decision  to  economize  and  refrain  from  buying  as  employment  had 
become  an  issue.     Decline  in  the  cost  of  living  and  money  saved  out 
of  prohibition  are  also  said  to  be  important  factors."     By  March  a 
Maryland  bank  official  was   reported  as  saying  that  "  he  never 
knew  a  time  when  so  many  depositors  have  been  compelled  to  draw 
on  their  savings  accounts  for  living  purposes.     *     *     *     Owing  to 
their  inability  to  find  work  and  being  driven  to  the  extremity,  they 
have  been  gradually  drawing  sums  out  of  the  banks  each  week  to 
meet  their  necessary  expenses."     On  May  11  the  Post  Office  Depart- 
ment announced  that  the  total  deposits  in  the  United  States  postal 
savings  system  on  May  1  were  approximately  $10,000,000  less  than 
on  April  1.     "At  the  large  industrial  centers,  where  there  is  con- 
siderable unemployment  or  wages  have  been  reduced,"  said  the 
department  report,  "  instead  of  the  usual  increase  in  deposits  there 
have  been  withdrawals  to  meet  the  living  expenses  of  depositors." 

Even  more  positive  evidence  came  from  permanent  relief  organi- 
zations in  61  cities.  With  but  few  exceptions,  all  who  replied  to 
questions  as  to  savings  stated  emphatically  that  a  vast  amount  of 
distress  had  been  forestalled  because  of  the  extent  to  which  unem- 
ployed workers  tided  themselves  over  the  immediate  emergency. 

Liberty  Bonds  were  likewise  sacrificed  by  the  unemployed.  To  a 
less  extent  jobless  wage-earners  sold  or  pawned  other  property  and 
surrendered  partly  paid  for  homes.  Striking  testimony  came  from 
the  charitable  and  relief  societies — of  interest  not  only  by  way  of 


Unemployment  Survey,  1920-21  199 

disclosing  what  happened  in  the  Winter  of  1920-21  but  also  to  sug- 
gest how  completely  unemployment  is  stripping  the  workers  clean 
of  what  material  gains  they  made  in  war  time  and  the  post-war 
boom. 

From  Sacramento  came  the  report:  "Most  of  them  lived  on 
their  savings  and  bonds,  selling  their  automobiles — a  great  many 
bought  them  when  they  received  a  raise  in  wages  in  1918-19.  *  *  * 
A  great  many  Liberty  Bonds  were  sold  from  November  until  March 
at  a  great  discount.  It  was  too  bad."  In  Waterbury,  Conn.,  "  our 
industries  began  laying  off  help  last  October,  but  owing  to  the  fact 
that  our  people  had  been  receiving  high  wages  and  many  had  savings 
and  Liberty  Bonds  the  problem  did  not  come  to  us  in  the  form  of 
requests  for  relief  until  about  the  middle  of  December  when  men 
with  large  families  began  to  apply." 

Similar  reports  came  from  such  widely  separated  cities  as  Chi- 
cago, Phoenix,  Springfield,  Mass.^  Worcester  ("  savings  banks  are 
reporting  unprecedented  withdrawals"),  Grand  Rapids,  New  York 
City,  Yonkers  ("  in  many  instances  families  lived  upon  savings  for 
three,  sometimes  four  months,  supplemented  by  earnings  from  odd 
days'  work"),  Dayton,  Newport,  Providence,  Spokane,  San  Fran- 
cisco, Milwaukee  ("  most  *  *  *  lived  upon  savings  from  three 
to  seven  months").  The  two  following  reports  are  fairly  repre- 
sentative : 

Lowell :  "  During  the  war  wages  had  been  very  high  and  every 
employable  member  of  most  families  was  at  work.  There  was  a 
period  of  saving.  These  savings  were  drawn  on.  Many  bank  ac- 
counts were  closed  out  entirely.  *  *  *  A  large  brokerage  firm 
reports  that  all  workers  having  Liberty  Bonds  sold;  them  when  they 
needed  the  money.  When  certain  shops  laid  off  help  the  bonds  were 
on  the  market." 

Rock  ford :  "  All  of  the  local  banks  report  that  the  unemployed 
have  been  drawing  on  their  savings.  In  many  cases  they  have  with- 
drawn all  that  they  had  accumulated  during  the  past  year  or  two.  J 
The  common  practice  has  been  to  take  out  at  the  rate  of  from  $25  to 
$30  a  week  rather  than  large  amounts  at  one  time.  *  *  *  Receipts 
in  the  various  savings  departments  of  the  city  have  been  reduced 
almost  to  a  minimum.  *  *  *  In  three  cases  we  have  known  of 
purchasers  of  homes  who  have  had  to  turn  over  the  contract  because 
of  inability.  *  *  *  Selling  Liberty  Bonds  has  been  quite  com- 


200  American  Labor  Legislation  Review 

Cities  reporting  the  sale  or  mortgaging  of  household  furniture, 
the  pawning  of  articles,  or  the  loss  of  partly  paid  for  homes,  included 
Indianapolis,  Boston,  New  Bedford,  Grand  Rapids,  Newark 
("  about  70  per  cent  of  unemployed  drew  upon  savings ;  about  3 
per  cent  sold  or  pawned  property"),  Utica,  Rochester,  Cleveland, 
Allentown,  Erie,  Knoxville,  Memphis.  Toledo  reported  that,  "  many 
stretched  their  credit  at  grocers,  with  landlords,  etc.,  to  the  limit; 
few  homes  sold,  many  mortgaged;  installment  furniture  returned. 
Only  about  10  per  cent  of  unemployed  men  in  Toledo  asked  for 
public  aid." 

Organization  for  Temporary  Relief 

Community  efforts  to  assist  the  unemployed  through  the 
Winter  of  1920-21,  to  a  marked  extent  took  the  form  of 
"  mayors'  "  committees,  representing  both  public  and  private  agen- 
cies, or  similar  bodies  in  which  citizens  were  brought  into  close 
working  relations  with  each  other  and  with  federal,  state,  county 
or  city  officials. 

Sixty-four  cities  reported  on  this  matter.  In  18  special  unem- 
ployment committees  of  a  public-private  character,  usually  appointed 
by  the  mayors,  were  created ;  in  14  cities  committees  of  private  or- 
ganizations or  of  citizens  generally  were  formed;  in  6  there  were 
special  unemployment  committees  of  chambers  of  commerce  or 
manufacturers'  associations;  in  5  there  were  city  or  state-wide 
"  conferences."  In  one  city — Toledo — an  emergency  labor  commis- 
sioner was  appointed  by  the  mayor  in  January  and  "  has  been  in 
constant  touch  since  with  the  work  done  by  the  welfare  department 
of  the  city  government  and  the  Social  Service  Federation." 

In  San  Francisco  a  special  unemployment  committee,  appointed 
by  the  mayor,  "  took  a  careful  survey  of  the  situation  and  decided 
that  it  would  be  unwise  to  create  a  special  fund  or  to  give  publicity 
to  the  unemployment  situation  under  existing  conditions.  Instead 
of  doing  so,  the  regular  agencies  were  asked  to  assist  the  situation 
even  if  it  necessitated  incurring  a  deficit.  The  work  was  divided 
between  the  Associated  Charities,  which  assumed  necessary  relief  for 
unemployed  family  men,  and  the  Salvation  Army,  which  undertook 
the  care  of  single  civilians,  and  the  Red  Cross,  who  cared  for  all 
soldiers,  either  family  men  or  single."  In  New  Britain,  the  city's 
/abor  bureau,  established  in  April,  found  jobs — nearly  all  "  street 
work,  pick  or  shovel " — for  some  1,600  men,  out  of  a  total  of  5,000 
unemployed,  by  July  1.  "  Our  instructions  from  the  mayor  are  to 


Unemployment  Survey,  1920-21  201 

place  the  most  needy  first,  most  deserving  next,  etc.,  but  to  allow  no 
one  to  go  to  bed  hungry.  When  work  cannot  be  given  applicants  are 
taken  to  the  charities  department  and  food,  etc.,  is  supplied."  Johns- 
town reports  that  while  no  special  committee  was  appointed  last 
Winter,  the  state  employment  bureau  has  a  committee  on  "  Prepar- 
ing for  Hard  Times  Before  They  Come." 

In  view  of  the  importance  of  creating  permanent  unemploy- 
ment committees  to  make  timely  plans  for  preventing  and  reliev- 
ing unemployment,  the  following  extracts  from  a  report  from 
Utah  are  quoted  here  as  an  example  of  how  not  to  proceed: 

At  a  conference  called  by  the  governor  to  consider  the  situation  *  *  * 
at  which  each  county  in  the  state  was  represented,  resolutions  were  adopted 
calling  upon  cities,  towns  and  counties  to  do  all  public  work  possible. 

On  being  questioned  the  governor  stated  that  the  state  had  no  money  to 
spend,  as  also  did  the  county  commissioners  of  Salt  Lake  County;  as  a  matter 
of  fact  all  the  county  officials  present  stated  they  had  no  public  money  to 
expend  on  road  work  or  improvements.  *  *  * 

Finally  the  conference  adjourned  in  a  squabble  after  adopting  a  resolution 
calling  upon  each  county  to  appoint  an  unemployment  committee.  Not  a  con- 
structive suggestion  was  made.  The  mayor  of  this  city  (Salt  Lake)  estimated 
that  at  that  time  there  were  6,000  unemployed  in  this  city  and  about  8,500  in 
the  county. 

Later  a  conference  was  called  by  the  mayor  and  chairman  of  the  county 
commission  of  this  county.  A  permanent  unemployment  committee  was  formed 
of  which  the  writer  is  a  member.  Nothing  has  come  of  it  so  far  but  talk. 
The  committee  adjourned  to  meet  at  the  call  of  the  chairman;  weeks  have 
passed  and  no  meeting  has  been  called.  Nothing  but  talk  is  the  result 
while  the  unemployed  starve.  The  mayor  said  that  he  had  heard  of  mal- 
nutrition but  never  in  his  life  had  he  seen  it  except  in  the  two  months  previous 
to  the  conference  when  parents  came  to  appeal  to  him  with  their  children  with 
drawn  faces  and  sunken  eyes. 

In  the  14  cities  where  organized  work  of  emergency  relief  was 
confined  to  committees  of  private  bodies  or  citizens,  it  was  found 
that  in  most  cases  the  committees  were  formed  to  bring  about  closer 
cooperation  between  existing  relief  agencies.  In  St.  Paul  there  was 
cooperation  between  representative  groups  to  induce  employers  to 
operate  on  part  time.  In  Lincoln  a  "  coal  committee  "  was  created 
by  the  Commercial  Club  and  other  civic  organizations  to  assist 
families  of  the  unemployed.  In  Schenectady  a  citizens'  relief  com- 
mittee provided  entertainments,  using  the  proceeds  to  relieve  persons 
who  would  not  apply  to  the  Department  of  Charities,  yet  needed 
assistance.  In  Philadelphia,  a  committee  of  social  agencies  on  un- 
employment "  resulted  in  excellent  team  work  "  and  secured  a  special 
appropriation  of  $10,000  for  unemployment  relief  administered  by 
the  city  department  of  public  welfare.  In  Spokane,  the  chamber 


202  American  Labor  Legislation  Review 

of  commerce  and  the  central  labor  council  were  jointly  represented 
on  a  special  unemployment  committee,  making  every  effort  to  secure 
employment  for  those  out  of  work.  About  $2,000  was  raised  by 
the  central  labor  council  as  a  special  fund  for  the  unemployed,  dis- 
bursed by  the  Social  Service  Bureau.  In  Manchester,  N.  H.,  a 
community  council  consisting  of  thirty  industrial,  philanthropic  and 
social  organizations  was  formed.  Expenses,  salaries  and  office 
costs  were  paid  by  the  Red  Cross,  the  council  acting  as  a  clearing- 
house for  all  philanthropic  organizations  in  the  city.  Its  function 
was  to  refer  all  applicants  for  assistance  either  to  an  established 
society  or  one  of  the  emergency  relief  funds  and  to  secure  work 
for  as  many  as  possible. 

One  of  the  most  ambitious  attempts  made  in  the  United  States 
to  organize  a  community  to  deal  with  unemployment  was  the  creation 
in  February,  1921,  of  the  "  Coordinating  Committee  on  Employment 
Activities  of  New  York  City,"  working  in  close  cooperation  with 
the  United  States  Employment  Service,  the  Women's  Bureau  of  the 
State  Industrial  Commission  and  the  Vocational  Division  of  the 
State  Department  of  Education.  In  its  first  bulletin  the  committee 
said: 

One  of  the  by-products  of  the  war  was  an  increased  interest  in  the  problems 
of  employment.  The  seriousness  and  the  loss  to  the  community  because  of 
unemployment,  inadequate  training  and  placement  have  become  more  and  more 
generally  recognized.  More  careful  attention  is  given  to  training,  guidance 
selections,  placement,  and  reduction  of  waste  due  to  employment.  In  response 
to  the  growing  interest  in  these  directions,  new  organizations  have  come  into 
being  and  the  work  of  existing  organizations  has  been  greatly  expanded.  As 
a  result,  there  has,  of  course,  been  overlapping  and  overlooking  and  a  general 
lack  of  understanding  in  the  plans  and  purposes  of  the  various  organizations. 
Above  all,  there  is  a  general  lack  of  fruitful  co-operation  between  the  training 
and  the  placement  agencies  with  the  employers'  and  employees'  group.  The 
desirability  of  co-ordinating  the  activities  of  these  various  groups,  the  im- 
portance of  better  training,  more  discriminating  placement,  better  organization 
of  the  employment  market  and  production  processes  as  means  of  reducing 
employment  is  peculiarly  apparent  at  the  present  time.  It  is  also  apparent  that 
no  single  agency  can  bring  about  significant  improvements  in  these  matters. 
This  must  come  through  the  co-ordination  of  the  different  groups  involved, 
co-operating  to  formulate  and  help  realize  a  community  employment  policy." 

Chambers  of  commerce  or  other  employers'  associations  in  sev- 
eral cities  appointed  special  unemployment  committees — as  in  Hart- 
ford, Wilmington,  Brooklyn  and  Fall  River,  where  the  Red  Cross 
emergency  loan  committee  of  representative  business  men  under  the 
direction  of  the  chamber  of  commerce  provided  food,  shoes,  etc., 
through  loans. 


Unemployment  Survey,  1920-21  203 

Efforts  by  labor  organizations  to  assist  the  unemployed  through 
special  committees  of  their  own  appear  to  be  negligible,  although  in 
Los  Angeles,  a  special  committee  of  the  central  labor  council 
"  worked  on  city  officials  to  stimulate  public  work  with  fair  results." 
And  from  the  Trades  and  Labor  Assembly  of  St.  Paul  came  an  inter- 
esting report  that  the  labor  movement  started  on  a  plan  to  employ 
its  own  people,  resulting  in  the  organization  of  the  "  People's 
Construction  Company,"  owned  and  controlled  by  organized  labor, 
which  competes  with  building  contractors.  By  July  15  it  had  a  pay- 
roll of  $4,000  weekly. 


"Work  Tests"  and  Relief  Jobs 

Out  of  71  cities  from  which  information  was  secured,  41  per- 
manent relief  organizations  reported  that  they  had  no  regular  means 
— such  as  a  wood  yard  or  laundry — for  furnishing  either  employ- 
ment, a  work  test  or  employment  with  training.  In  Phoenix,  the 
Associated  Charities  had  a  wood  yard  for  men  and  laundry  and 
cleaning  for  women.  Oakland  had  a  municipal  lodging  house  and 
wood  yard  which  employed  from  100  to  150  unemployed  single  men 
daily  in  cutting  wood  in  one  of  the  undeveloped  sections  of  the 
city.  They  received  in  return  shelter  and  food  at  the  lodging  house. 
"  Every  alternate  day  was  spent  in  looking  for  employment,  so  that 
one  day's  work  paid  for  two  days'  lodging." 

Other  cities  reporting  wood  yards  in  use  included  Brooklyn, 
Wilkes  Barre,  New  Haven,  Davenport,  Baltimore,  Paterson  and 
Boston.  Sacramento  "had  none  for  the  last  two  years  *  *  * 
abandoned  during  the  war  *  *  *  we  may  next  year." 

In  the  great  majority  of  cases  such  temporary  relief  work  was 
carried  on  without  the  aid  of  city  or  other  public  agencies,  but 
through  the  close  co-operation  of  various  permanent  relief  organ- 
izations. 

In  Cincinnati  there  was  a  "  small-job  "  committee  composed  of 
some  of  the  heads  of  different  organizations  and  a  number  of  volun- 
teer workers  who  gave  full  and  some  part  time.  The  committee 
was  directly  under  the  supervision  of  the  special  unemployment  com- 
mittee appointed  by  the  mayor. 

It  was  the  duty  of  this  committee  to  find  the  small- job,  which  they  asked 
the  housewife  and  business  man  to  create,  for  the  express  purpose  of  taking 
care  of  this  situation.  For  instance,  such  work  as  whitewashing  cellars, 
painting,  papering  (which  was  out-of -season),  raking  leaves,  cleaning  yards — 
in  fact,  asking  the  public  to  actually  create  work,  in  the  small-job  way.  The 


204  American  Labor  Legislation  Review 

physicians  were  asked  to  tell  their  patients,  the  attorneys  were  asked  to  speak 
to  their  clients,  the  pastors  and  priests  were  asked  to  notify  their  congrega- 
tions, etc.,  each  one  to  call  the  "Small-Jobs  Committee,"  who  was  located 
with  the  state-city  labor  exchange,  and  easily  accessible  by  phone  or  personal 
call.  As  a  whole,  7,000  transients  were  cared  for  during  this  period. 

From  the  Associated  Charities  of  Waterbury,  Conn.,  came  the 
following  interesting  report: 

From  the  middle  of  December,  1920,  to  April  1st,  1921,  our  Association 
worked  out  a  scheme  with  the  Street  and  Park  Departments  by  which  the 
city  furnished  the  work,  tools,  foremen,  and  teams  and  our  Association  paid 
the  men  at  the  rate  of  35  cents  an  hour  out  of  funds  collected  by  the  Asso- 
ciation from  private  individuals.  Owing  to  the  open  winter  it  was  possible 
for  the  men  to  do  street  grading  and  other  outside  work  practically  every  day 
during  the  winter  months.  The  reason  our  Association  paid  the  men  was 
because  the  city  had  no  funds  available  at  that  time  for  this  purpose,  its 
departments  being  on  the  budget  system.  During  this  time  our  Association 
spent  approximately  fifteen  thousand  dollars. 

By  April  1st  the  situation  became  more  serious  with  increasing  numbers 
of  men  applying  for  help.  We  then  called  a  meeting  of  citizens,  manufacturers 
and  city  officials  to  consider  the  problem  of  additional  funds  and  facilities  for 
more  work.  This  conference  resulted  in  a  bond  issue  of  about  $700,000  by  the 
city  for  water  extensions,  street  improvements,  and  park  work.  As  soon  as 
the  bond  money  was  available  about  the  first  week  in  April,  the  identical 
scheme  that  prevailed  during  the  first  three  months  was  continued  with  the 
exception  that  the  men  were  paid  out  of  the  city  treasury  and  at  the  City  Hall 
instead  of  at  the  office  of  the  Associated  Charities.  This,  of  course,  enabled 
us  to  take  on  considerably  more  men.  We  have  been  employing  on  an  average 
of  three  to  four  hundred  men  a  week  in  this  way  and  by  alternating  them  with 
one  week  on  and  one  week  off  we  have  been  able  to  take  care  of  approximately 
six  hundred  men  on  our  active  work  list.  This,  of  course,  has  changed  as  the 
men  found  work  in  other  industries  and  new  men  applied. 

In  Toledo  "  the  Social  Service  Federation  has  wherever  possible 
put  into  effect  the  work  test,  especially  with  the  floating  element, 
and  in  a  great  many  cases  in  dealing  with  recipients  of  relief  who 
are  residents  of  Toledo  and  have  families.  *  *  *  For  a  consider- 
able time  while  the  relief  was  being  given  it  was  not  possible  to 
apply  the  work  test  to  the  heads  of  families.  *  *  *  While  the 
work  test  was  applied  to  all  men  whose  families  were  receiving  the 
relief  the  demand  for  relief  dropped  down  to  50  per  cent." 

Meriden,  Conn.,  "  gained  temporary  jobs  through  publicity  in  the 
newspapers."  In  New  Haven,  the  chamber  of  commerce  sent 
printed  cards  to  employers  and  social  agencies  asking  them  to  find 
work  or  employ  ex-service  men,  and  the  charities  organization 
"  found  employment  for  quite  a  number  of  individuals  at  casual 
labor,  but  manufacturers  are  unwilling  to  lay  up  a  supply  of  manu- 
factured articles  and  add  to  their  inventory."  In  Akron  contacts 


Unemployment  Survey,  1920-21  205 

were  established  with  employers  which  resulted  in  their  taking 
on  married  men  first,  limiting  hiring  to  local  men  and  some  part- 
time  work.  Erie  depended  principally  on  direct  appeal  for  the 
benefit  of  individual  families  going  by  preference  to  former 
employers.  "  We  have  been  quite  successful  in  securing 
work  on  the  individual  appeal  basis.  Our  state  employment  bureau 
has  systematically  given  preference  to  men  whose  family  conditions 
were  certified  to  them."  In  Knoxville  a  meeting  of  city  officials  and 
large  employers  adopted  a  plan  that  citizens  loan  sums  of  from  $500 
to  $3,000  to  the  city,  receiving  in  return  certificates  of  indebtedness. 
These  individual  loans  reached  the  total  of  $8,000,  which  was  used 
in  paying  the  "  charity  squad  "  for  street  work  at  20  cents  an  hour. 
"  This  was  successful." 

Food,  Clothing,  Shelter,  Money  and  Loans 

No  comprehensive  data  were  obtainable  as  to  the  amounts  spent 
during  the  Winter  of  1920-21  for  material  relief  to  idle  workers  and 
their  families.  Yet,  from  all  reports  received  it  was  apparent  that 
in  at  least  half  of  the  large  industrial  centers  the  expenditures  for 
this  purpose  were  exceedingly  heavy — despite  the  amazing  extent  to 
which  the  unemployed  had  been  able  to  tide  themselves  financially 
over  the  first  months  of  unemployment. 

Food  and  shelter  and  other  necessaries  were  as  a  rule  given  only 
in  return  for  work,  except  in  cases  of  desperate  need  or  to  prevent 
suffering  among  children.  In  some  cities,  as  in  New  Bedford  and 
Akron,  loans  of  money  were  made  to  the  unemployed,  while  in 
others,  as  in  Fall  River,  food,  insurance,  shoes,  etc.,  were  provided 
by  order  as  loans. 

In  San  Francisco  unemployed  family  men  provided  with  work 
that  needed  to  be  done  at  the  Relief  Home  were  paid  by  the  Asso- 
ciated Charities  largely  in  food  and  at  the  rate  of  50  cents  an  hour. 
"  Each  man  was  allowed  to  work  so  that  he  could  provide  adequate 
food  for  his  family  and  really  excellent  quality.  Groceries  and 
vegetables  were  bought  at  wholesale  prices  and  distributed  directly 
to  the  men  at  the  Relief  Home,  where  they  were  also  furnished  by 
the  management  with  an  excellent  dinner." 

Public   Employment  Bureaus 

The  unfortunate  results  of  the  blow  struck  by  Congress  last  year 
at  the  United  States  Employment  Service,  in  cutting  its  appropria- 
tion down  to  skeleton  proportions  were  apparent  throughout  the 


206  American  Labor  Legislation  Review 

country.  Almost  without  exception  local  agencies — state,  city  and 
private — turned  to  the  federal  offices  (what  was  left  of  them)  for 
cooperation.  And  almost  without  exception  the  testimony  was 
that  such  cooperation,  where  it  did  exist,  was  "  effective." 

In  New  Jersey,  for  example,  the  state  director  of  employment 
reports,  "  the  curtailment  of  the  federal  funds  appropriated  for  pub- 
lic employment  work  has  acted  to  reduce  the  number  of  public 
offices  in  New  Jersey  from  15  to  7."  In  order  to  overcome  this 
handicap,  however,  "  local  committees  have  been  formed  in  Newark, 
Jersey  City,  Camden  and  other  cities  of  representatives  of  the  state, 
municipal  governments,  chambers  of  commerce  and  relief  organiza- 
tions, and  they  have  directed  appeals  to  the  citizens  to  create  what 
odd  jobs  and  repair  work  were  possible,  centering  such  calls  in  the 
public  employment  bureau." 

Among  the  states,  New  York's  position  was  particularly  unenvi- 
able. The  political  reorganization  of  the  state  labor  department 
by  the  governor  and  the  state  legislature  in  1921  resulted — in  the 
face  of  increasing  unemployment — in  the  closing  down  of  a  number 
of  state  employment  offices.  This  reactionary  move  aroused 
widespread  protest  and,  according  to  reports  from  a  number  of  the 
principal  industrial  cities  of  the  state,  served  to  cripple  community 
efforts  to  combat  unemployment — as  far  as  it  could  be  mitigated  by 
labor  placements.  Thus,  the  Merchants  Association  of  New  York 
State,  on  July  5,  1921,  protested  that  unemployment  conditions  are 
too  serious  to  warrant  the  discontinuance  of  the  public  employment 
bureaus.  After  a  special  inquiry,  a  committee  of  the  Association 
had  found  that  "  it  is  very  important  that  the  state  should  maintain 
as  many  of  these  employment  bureaus  as  possible." 

Out  of  55  cities  reporting  3  took  some  action  between  December 
1,  1920,  and  June  1,  1921,  relating  to  employment  bureaus.  Savan- 
nah and  New  Britain  established  city  labor  bureaus  and  Portland, 
Ore.,  enacted  an  ordinance  prohibiting  private  employment  agencies 
from  publicly  advertising  for  foreigners  to  fill  jobs  at  their  dis- 
posal. 

There  was  some  state  action.  North  Carolina  established  a  state 
free  employment  service ;  Arizona  passed  a  law  creating  an  indus- 
trial commission  regulating  employment  offices  and  administering 
the  accident  compensation  law  (which  has  since  been  held  unconsti- 
tutional) ;  Kansas  in  March  appropriated  $20,000  yearly  for  its  six 
state  employment  offices ;  Nebraska  appropriated  $8,768  to  be  used 
in  cooperation  with  the  federal  employment  service;  North  Dakota 


Unemployment  Survey,  1920-21  207 

appropriated  $10,000  for  the  state  free  employment  service  covering 
two  years  and  providing  for  cooperation  with  the  federal  service. 
Ohio  appropriated  $15,000  extra  for  the  Cleveland  state-city  em- 
ployment office  to  offset  the  withdrawal  of  financial  support  by  the 
Welfare  Federation. 

Significantly,  the  reports  from  chambers  of  commerce  and  other 
business  organizations  were  overwhelmingly  favorable  toward  pub- 
lic employment  bureaus.  Out  of  28  cities  reporting  on  this  ques- 
tion, the  employers'  associations  in  19  expressed  themselves  as 
strongly  favorable  to  the  public  employment  service,  4  were  non- 
committal and  only  5  expressed  opposition.  At  the  same  time  sev- 
eral employers'  representatives  criticized  the  private  fee-chargjmg 
agencies  for,  as  one  expressed  it,  "  collecting  exorbitant  fees  on 
mythical  jobs."  Paterson,  N.  J.,  employers  raised  the  objection 
"  there  is  much  repeating  f>f  employees  and  *  *  *  general  dis- 
satisfaction among  employers  that  there  is  no  control  over  these 
floaters  who  are  continually  going  from  job  to  job."  Cincinnati 
manufacturers  felt  that  either  the  executives  of  public  employment 
bureaus  in  charge  were  "not  able  to  handle  the  position  or  that 
necessary  funds  were  lacking."  In  striking  contrast  with  these 
views,  however,  were  those  of  the  merchants  and  manufacturers  in 
Phoenix,  Pueblo  ("apparently  a  success"),  Hartford  ("very  ex- 
cellent work  is  being  done  by  the  state  employment  office  *  *  * 
particularly  in  the  placing  of  unskilled  labor");  Boston  ("help- 
ful"); Worcester  ("effective  work");  Buffalo  ("very  satisfac- 
tory ")  ;  Schenectady  ("  state  employment  bureau  which  goes  out 
of  commission  this  week  due  to  lack  of  funds  from  the  state  depart- 
ment of  labor  has  done  good  work  here")  ;  Fort  Worth  ("cannot 
say  too  much  in  behalf  of  municipal  employment  agency  and  believe 
it  accomplished  great  things  in  relieving  unemployment ")  ;  Seattle 
("city-federal  employment  bureau  was  of  great  assistance"). 


Public  Works 

When  the  wheels  of  private  industry  stop  and  millions  of  workers 
are  suddenly  cut  off  from  their  earnings,  it  is  not  charitable  relief 
but  useful  work  that  is  demanded  both  to  conserve  the  best  interests 
of  the  community  and  to  maintain  the  self-respect  of  the  workers 
who  are  jobless  through  no  fault  of  their  own.  Hence — aside  from 
the  relatively  few  and  futile  "  made  "  jobs  that  may  be  resorted  to — 
work  for  the  workless  can  best  be  provided  by  pushing  forward  pub- 


208  American  Labor  Legislation  Review 

lie  works  and  starting  new  public  improvements  immediately.  This 
was  done  effectively  in  many  cities  during  the  Winter  of  1920-21. 

Out  of  81  cities  from  which  reports  on  public  works  were  re- 
ceived, 24  cities  made  provisions  for  about  $10,000,000  of  bond 
issues  and  appropriations. 

Cities  that  voted  bond  issues  to  provide  public  work  or  relief  for 
the  unemployed  included  Phoenix,  with  $465,000  for  public  improve- 
ments— "  will  bring  work  to  almost  all  unemployed  within  90  days ; 
unemployment  not  felt  until  February;"  Bridgeport  ("state  legis- 
lature recently  authorized  city  to  issue  $300,000  short-time  notes  for 
relief,  but  it  is  unknown  whether  this  will  be  spent  in  work  or  in 
,  outdoor  relief ")  ;  New  Britain,  grading  and  sewer  construction 
started  and  moved  forward;  bond  issue  authorized  by  1921  legisla- 
ture ;  New  Haven,  $250,000  extra  bonds  for  improvement  of  parks, 
roads,  bridges,  new  fire  houses ;  Waterbury,  $700,000  for  water  ex- 
tensions, street  improvements  and  park  work;  Lynn,  $75,000  for 
road  building;  Flint,  Mich.,  $500,000  for  sewer  work  which  was 
both  started,  and  moved  forward;  Minneapolis,  over  $1,000,000 
bonds  for  street  work — "  expect  money  from  eastern  buyers  in  June 
to  start  work ;"  Dayton,  about  $100,000  bonds  taken  by  sinking  fund, 
for  moving  forward  sewer  work;  Toledo,  $286,000  for  permanent 
park  improvements ;  Fort  Worth,  "  county  issued  $4,000,000  bonds 
for  good  roads,  available  at  time  unemployment  became  serious; 
city  provided  $1,900,000  for  sewer  and  water  extensions,  work 
hastened  to  meet  unemployment ;  also  large  amount  of  street  paving 
speeded  up."  In  Jackson,  Miss.,  significantly,  where  a  bond  issue 
for  1921  improvement  program  was  voted  down  at  the  April,  1921, 
election,  "  people  are  now  demanding  a  special  election,  which  will  be 
held  August  1  to  reconsider  the  bond  proposition  so  public  work  can 
be  started  to  give  work  to  the  unemployed." 

Cities  that  made  other  provisions,  mainly  by  appropriations,  for 
moving  forward  or  starting  public  works  as  emergency  aid  to  the 
unemployed  included  Oakland,  Bridgeport,  Hartford,  Augusta,  Ga., 
Moline,  Shreveport,  Baltimore,  Lowell,  Grand  Rapids,  Elizabeth, 
N.  J.,  Newark,  Paterson,  Schenectady  and  Seattle. 

In  hiring  the  unemployed  on  street  improvements  and  other  pub- 
lic works  most  cities  appear  to  have  maintained  the  same  standards 
of  wages,  hours  and  efficiency  as  are  required  for  the  city's  regular 
work.  Out  of  34  cities  sending  detailed  data  on  public  works  started 
or  moved  forward  expressly  to  aid  the  unemployed,  17  cities,  or  half, 
had  adopted  definite  standards  of  labor  for  the  emergency  employ- 


Unemployment  Survey,  1920-21  209 

ment.  All  of  these  cities  required  the  same  efficiency  as  is  usual  for 
city  work  with  the  exception  of  Seattle,  where  50  per  cent  to  60  per 
cent  was  regarded  as  satisfactory,  and  Hartford  which  was  content 
with  75  per  cent. 

Direct  hiring  was  the  rule ;  1 1  cities  hiring  the  men  directly,  one 
city  letting  out  the  work  under  contract,  while  5  cities  provided  the 
work  under  both  direct  hiring  and  contract. 

In  11  cities  wages  paid  were  at  the  regular  rate,  ranging  from 
$1.75  for  a  five-hour  day  in  Hartford  to  $4.75  for  an  eight-hour  day 
in  Seattle.  The  hourly  rate,  which  was  most  common,  ranged  from 
30  cents  in  Baltimore  (less  than  the  regular  rate)  ;  42^  cents  in 
Dayton  (less  than  regular  rate)  ;  40  cents  in  Flint  (regular  rate)  ; 
52  to  57  cents  in  Newark  (regular  rate)  to  60  cents  an  hour  (reg- 
ular rate)  in  Lynn.  In  all  cases  the  daily  hours  of  work  required 
were  the  regular  hours — ranging  from  five  hours  in  Hartford,  eight 
hours  in  11  cities,  up  to  ten  hours  in  Flint  and  Waterbury. 

Rotation  of  workers  was  employed  in  eight  cities,  varying  from 
the  plan  of  working  one  week  and  then  being  laid  off  to  changing 
gangs  every  three  days. 

In  selecting  the  men  for  the  emergency  city  jobs,  married  men 
with  families  or  with  dependents,  who  were  local  residents  were  in 
almost  all  cases  given  preference;  in  some  cases  ex-soldiers  being 
also  put  in  the  preferred  class,  and  in  two  cities,  Moline  and  Dayton, 
it  was  further  required  that  those  put  first  on  the  list  for  employment 
be  "  American  citizens."  No  city  reporting  had  work  enough  to 
take  care  of  all  who  applied.  Thus,  in  Seattle  there  was  work  for 
only  727  out  of  1,560  applying;  in  Milwaukee,  jobs  for  300  out  of 
2,000  applying;  Paterson,  150  jobs  for  220  applicants;  Flint,  200 
jobs  for  500  applicants;  Moline,  500  jobs  for  1,000  applicants; 
Waterbury,  3,000  jobs  for  4,000  applicants;  Hartford,  350  jobs  for 
1,000  applicants  and  in  Dayton  only  2,000  jobs  available  while  there 
were  1,000  men  applying  for  the  work  every  day.  It  is  to  be  noted 
that  the  city  work  here  reported  began  in  many  cases  in  the  early 
Spring,  although  in  a  few  cities,  as  in  Dayton,  Flint  and  Seattle,  the 
work  was  started  as  early  as  February. 

Reports  were  practically  unanimous  that  all  groups  in  the  com- 
munity were  ready  to  lay  aside  partisan  prejudices  and  unite  on  plans 
for  extending  public  works  to  tide  over  the  industrial  depression. 

Cities  in  all  parts  of  the  country  failed  to  make  efforts  to  reserve 
necessary  improvements  for  bad  seasons  or  bad  years.  Out  of  13 
representative  cities  making  reports  on  this  point,  11  said  nothing  at 


210  American  Labor  Legislation  Review 

all  had  been  done  to  this  end.  Only  two  cities  had  a  positive  word — 
Kansas  City,  Kan.,  where  the  city  "  regularly  tried  to  let  contracts  in 
dull  seasons  "  and  Milwaukee  (which,  by  the  way,  has  a  contingency 
fund),  where  such  emergencies  are  taken  care  of  as  they  present 
themselves. 

Neither  have  cities  generally  undertaken  to  maintain  a  sinking 
fund  to  be  used  in  starting  emergency  work  when  needed.  Dayton 
was  the  only  city  out  of  17  that  had  such  a  fund;  14  reported  none 
at  all  and  in  only  2  were  there  any  helpful  financial  provisions  of 
this  nature  made  as  a  regular  matter — Milwaukee,  which  maintains 
a  contingency  fund,  and  Kansas  City,  Kan.,  where  there  is  a  5  per 
cent  levy  to  take  care  of  the  engineer's  department  so  that  when 
there  is  much  public  improvement  an  emergency  or  general  fund  is 
accumulated  to  draw  upon. 

Charter  limitations  as  a  rule  limited  city  expenditures  for  emer- 
gency public  works  to  aid  the  unemployed.  Out  of  13  cities  furnish- 
ing definite  data  all  were  restricted  by  the  city  charter  with  the 
exception  of  Seattle.  In  no  cases  were  there  any  steps  taken  to 
have  the  limitations  removed. 

Part  Time  Employment  in  Industry 

Employers  generally  made  use  of  the  short  day,  the  short  week, 
shifting  or  rotating  employees,  "  making  to  stock "  and  pushing 
plant  repairs  or  improvements,  in  an  effort  to  avert  as  much  unem- 
ployment as  possible.  Manufacturers  and  business  establishments 
applied  such  of  these  measures  as  would  fit  in  with  their  own  plant 
conditions  in  an  individual  way,  much  as  unemployed  wage-earners 
bore  the  burden  of  the  early  months  of  idleness  almost  wholly  as 
individuals  and  families  and  not  as  organizations. 

Business  associations  in  41  cities  that  included  information  on 
this  point  in  their  reports  were  in  almost  unanimous  agreement 
that  the  short  day  and  the  short  week  were  the  most  widely  used 
devices.  In  all  but  4  of  these  cities  "  many  "  or  "  practically  all  " 
industries  went  on  the  short  day  or  the  short  week,  or  both. 

Shifting  or  rotating  employees  was  not  so  common:  in  Phoenix 
it  was  done  "  in  the  big  mines  " ;  in  Pueblo  it  was  "  the  most  common 
plan  to  meet  unemployment  and  is  successful " ;  in  Hartford  and 
Wilmington  it  was  tried  by  one  large  plant  on  a  "  one  week  on,  one 
week  off  basis  " ;  in  New  Haven  "  practically  all "  did  it  "  success- 
fully"; in  Gary  the  steel  company  did  it  (together  with  the  short 
week),  thus  "at  present  making  it  possible  for  2,500  men  to  work 


Unemployment  Survey,  1920-21  211 

who  would  otherwise  be  entirely  out  of  employment  " ;  in  Indianapo- 
lis it  was  common  with  the  automobile,  packing  and  furniture  indus- 
tries; in  Evansville,  Ind.,  with  a  large  steam  shovel  company 
(Bucyrus)  ;  in  Syracuse  with  the  steel  industry;  in  Cincinnati  with 
steel  plants,  railroads  and  rolling  mills ;  in  Seattle  with  longshore 
work ;  while  in  Lynn  "  union  rules  apportion  work  so  all  get  a 
share  " ;  in  Minneapolis  "  it  was  attempted  by  nearly  all." 

There  was  some  "  making  to  stock  "  despite  the  uncertainties  of 
the  trend  of  prices  of  raw  materials  on  the  one  hand  and  the 
"  buyers'  strike  "  on  the  other.  This  was  true  notably  in  Phoenix 
(sash  and  door),  Evansville,  Fort  Wayne  (water  driven  motor 
pumps),  Minneapolis  ("  making  up  of  stock  has  been  carried  to  the 
limit  of  the  financial  ability  of  the  firms  involved  and  their  view- 
point as  to  price  fluctuations  "),  Cincinnati  (rolling  mills,  steel  plants 
and  glucose  plants),  Toledo  ("this  has  been  done  consistently 
throughout  the  different  industries ;  in  fact  some  of  the  manufactur- 
ers have  gone  almost  too  far  for  their  own  safety  in  doing  this  "). 
And  in  Niagara  Falls  ("  practically  all  because  most  are  basic  indus- 
tries "  but  "  storage  limit  about  reached  "). 

Using  the  depression  as  an  opportunity  to  make  plant  repairs  or 
improvements  with  labor  that  would  otherwise  be  let  out,  it  appeared, 
was  not  extensive.  In  some  places  like  Cleveland  and  Cincinnati 
it  was  done,  extensively,  as  well  as  in  the  mines  of  Arizona ;  but  on 
the  whole  this  was  a  negligible  factor.  New  Haven's  plant  im- 
provements had  been  made  "  during  the  war."  In  Rochester  there 
was  little  of  it  "  because  of  strikes  and  building  costs." 

Little  information  was  forthcoming  from  chambers  of  commerce 
and  other  business  bodies  as  to  the  basis  upon  which  the  workers 
to  be  kept  as  long  as  possible  were  selected.  "  Efficiency  "  is  the  test 
most  frequently  cited.  In  Phoenix  the  aim  of  employers  was  to  keep 
men  who  are  "  real  mechanics,  also  tax  payers  and  property  own- 
ers " ;  in  Denver,  the  "  more  efficient  workers  " ;  in  Rochester,  "  the 
most  efficient  and  economically  dependent " ;  while  in  Syracuse  the 
following  were  considered  (1)  efficiency,  (2)  resident  or  non-resi- 
dent, (3)  number  of  dependents,  (4)  length  of  service,  (5)  ability 
to  do  other  work. 

Wage  Reductions 

Wages  in  all  sections,  almost  without  exception,  were  reduced. 
Reductions  varied  greatly.  For  example,  the  decreases  ranged  from 
10  per  cent  to  15  per  cent  in  factories  generally  in  several  cities 


212  American  Labor  Legislation  Review 

reporting  to  20  per  cent  in  big  steel  industries,  22^  per  cent  in  im- 
portant textile  industries  and  even  25  per  cent  in  factories  in  many 
sections.  The  building  trades  as  a  rule  appeared  to  be  most  resist- 
ant to  wage  cuts,  though  in  Phoenix  the  builders'  exchange  reported 
a  reduction  on  March  1  with  another  expected  "  soon,"  both  totalling 
25  per  cent. 

Reflections  of  the  "  open  shop  "  war  appeared  in  many  reports. 
One  important  California  chamber  of  commerce  remarked: 

Quite  a  few  of  our  employers  take  the  position,  that  as  these  organizations 
(labor  unions)  were  very  insistent  in  urging  the  claims  of  their  members  for 
increased  wages  during  the  labor  shortage,  they  should  now  assume  the  burden 
of  protecting  them  through  the  present  depression.  On  the  other  hand,  Open 
Shop  concerns  have  shown  an  earnest  desire  to  cooperate  with  the  men  who 
have  stood  by  them,  thus  setting  up  another  strong  argument  in  favor  of  the 
American  Plan  or  Open  Shop. 

"  Employers,  generally,  are  very  bitter  about  the  whole  matter," 
reported  a  settlement  in  the  East.  "  They  feel  that  the  demands 
of  labor  have  been  so  arrogant  during  the  period  of  the  scarcity  of 
labor  that  it  is  not  incumbent  on  them  to  feel  any  sympathy  or  to 
take  measures  to  alleviate  conditions.  There  are,  of  course,  many 
shining  exceptions." 

A  charitable  organization  in  the  South  wrote  that  it  was  "  afraid 
that  the  business  men  have  welcomed  the  unemployment  situation 
as  a  means  of  bringing  down  wages." 

From  the  Middle  West  a  settlement  association  reported  that 
"  many  working  people  feel  that  unemployment  is  largely  due  to  an 
organized  effort  on  the  part  of  employers  to  bring  down  wages  and 
break  the  union  " — a  suspicion  that  was  reflected  in  a  resolution 
adopted  by  the  American  Federation  of  Labor  at  its  Denver  con- 
vention in  June,  which  declared  that  "  it  is  apparent  that  a  portion 
of  this  industrial  depression  is  artificial  and  was  manufactured  by 
profiteering  for  the  purpose  of  lowering  living  and  working  stand- 
ards, weakening  the  organized  labor  movement  and  breaking  the 
morale  and  spirit  of  the  workers." 

Regularization  of  Industry 

Constructive  plans  for  permanent  regularization  of  industries 
were  reported.  In  Chicago,  the  Joint  Board  of  Employers  and 
Workers  in  the  "  ready-made  "  part  of  the  clothing  industry,  to 
meet  the  situation  of  a  heavy  demand  for  workers  in  one  branch 
of  the  industry  and  slack  time  in  the  other,  worked  out  a  plan  which 
permits  the  transfer  of  cutters  formerly  employed  by  the  tailor-to- 


Unemployment  Survey,  1920-21  213 

the-trade  houses  (who  would  therefore  be  unemployed  or  working 
only  part  time)  to  ready-made  houses  where  there  is  a  need  for 
their  services.  Later,  it  was  explained,  when  the  tailor-to-the-trade 
season  begins  and  the  ready-made  industry  slackens  a  new  readjust- 
ment can  be  made — "  thus  the  union  has  been  able  to  work  out,  so 
far  as  the  cutters  are  concerned,  a  scientific  distribution  of  the 
workers  to  meet  the  needs  of  the  industry,  make  the  best  use  of 
the  man  power  in  the  market,  eliminate  waste  and  provide  for  more 
continuous  employment  for  our  members. " 

The  most  notable  recent  effort  to  lessen  unemployment  by  regu- 
larizing industry  was  reported  from  Cleveland.  In  summing  up 
"  the  new  methods  that  are  being  worked  out  in  the  garment  industry 
gradually  to  eliminate  or  at  least  lessen  unemployment,'5  the  manager 
of  the  Cleveland  Garment  Manufacturers  Association  wrote: 

As  you  may  be  aware,  we  have  in  this  industry  a  co-operative  arrangement 
between  the  employers,  the  employees,  and  an  impartial  board  of  referees. 
Wages  are  now  set  by  the  board  of  referees  following  an  annual  hearing.  In 
April  of  this  year  the  referees  granted  a  wage  decrease  approximately  of 
13  per  cent  but  they  at  the  same  time  caused  an  unemployment  fund  to  be  set 
aside  equal  to  7^  per  cent  of  the  direct  labor  payroll  in  each  plant.  In  the 
26  weeks  following  June  1st  of  this  year  each  worker  is  being  guaranteed  at 
least  20  weeks  of  employment.  Failing  to  secure  this,  he  is  permitted  to  draw 
upon  the  unemployment  fund  to  the  extent  of  2/3  of  his  minimum  wage. 
This,  of  course,  places  the  burden  for  unemployment  directly  upon  the  manu- 
facturer and  while  his  losses  are  limited  to  7%  per  cent,  yet  he  can  save  any 
or  all  of  this  amount  by  providing  20  weeks  of  work  to  each  of  his  employees. 

Unemployment  funds  were  found  in  successful  operation  in  sev- 
eral manufacturing  establishments — notably  the  Dennison  Manu- 
facturing Company  at  Framingham,  Mass.,1  and  the  Deering  Milli- 
ken  Company  bleacheries  at  Wappingers  Falls,  N.  Y.,1  and  else- 
where. But  such  constructive  permanent  provisions  for  safe- 
guarding industries  against  the  demoralization  of  unemployment 
crises  were  found  to  be  so  few  and  scattering  that,  taking  the  country 
as  a  whole,  they  may  still  be  said  to  be  a  negligible  factor  in  reliev- 
ing or  preventing  unemployment. 

Unemployment  Insurance 

Progress  was  made  toward  the  adoption  of  unemployment  insur- 
ance legislation.  In  many  states  there  was  increased  interest  in 
agitation  for  an  unemployment  insurance  law  in  1921,  particularly 


1  Described  in  detail  in  the  American  Labor  Legislation  Review,  Vol.  XI, 
No.  1,  March,  1921,  pp.  41-47  and  pp.  53-59. 


214  American  Labor  Legislation  Review 

by  labor  organizations,  civic  and  social  service  organizations  and 
progressive-minded  employers,  but  no  legislation  came  out  of  the 
reactionary  sessions  of  1921.  In  Pennsylvania  an  unemployment 
insurance  bill  was  introduced  in  the  legislature  with  strong  repre- 
sentative backing.  And  in  Wisconsin,  where  a  similar  bill  was 
introduced  and  aroused  state-wide  interest,  a  favorable  report  was 
secured  from  the  Senate  committee  having  the  bill  in  charge.  It 
was,  however,  defeated  in  the  closing  days  of  the  session,  when  its 
own  sponsors  refused  to  accept  it  with  some  impracticable  amend- 
ments that  had  been  voted  into  it  by  the  Senate. 

Unemployment  Handled  Slightly 
Better  in  1920-21 

Conditions  of  unemployment  in  the  Winter  of  1920-21  presented 
several  important  aspects  that  made  comparison  with  1914-15  diffi- 
cult. While,  on  the  whole,  it  appeared  that  communities  profited 
by  the  experiences  of  six  years  ago  and  made  somewhat  better  pro- 
visions for  combating  the  evils  of  unemployment,  still  this  must  be 
somewhat  discounted  because  of  the  remarkable  extent  to  which 
the  unemployed  wage-earners  themselves,  through  their  savings  and 
other  resources,  lightened  the  responsibilities  that  would  otherwise 
have  taxed  to  the  limit  the  best  of  organized  community  efforts. 
What  credit  there  is  for  improved  "  handling  "  of  the  situation  in 
1920-21  must  go  for  the  most  part  not  to  industry,  not  to  relief 
societies,  not  to  city  fathers,  not  to  citizens  committees,  but  most 
largely  to  those  least  to  blame — the  victims  of  involuntary  unemploy- 
ment. They  were  able  temporarily  to  exist  on  their  own  savings. 

Yet,  community  planning  and  activity  for  emergency  relief  as 
worked  out  during  this  period — and  in  some  cities  being  put  to  severe 
test,  as  where  unemployment  hit  first  and  where  the  unemployed 
first  exhausted  their  own  resources — showed  a  little  improvement 
over  six  years  ago. 

Out  of  17  cities  able  to  make  comparisons,  9  reported  that  there 
was  definitely  "  better  "  handling  of  unemployment  between  Decem- 
ber 1,  1920,  and  June  1,  1921,  than  in  1914-15.  Various  reasons 
were  given :  "  cooperative  methods  now  in  use " ;  "  city  employ- 
ment bureau  now  organized  " ;  "  state  employment  bureaus  created  " ; 
"  more  comprehensive  plans  for  emergency  public  work  " ;  "  previ- 
sion and  effective  community  organization." 

In  unfavorable  contrast  with  the  spirit  of  most  industrial  centers 
has  been  that  of  two  of  the  greatest  cities  of  the  United  States — 


Unemployment  Survey,  1920-21  215 

Boston  and  Chicago.  Throughout  the  Winter  of  1920-21  both  these 
major  industrial  centers  lay  back  in  neglect  and  indifference,  as  the 
reports  agree,  and  on  June  1  there  was  no  immediate  prospect  of 
either  stirring  into  action. 

Policies — Good  and  Bad 

With  a  single  voice  the  cities  bearing  testimony  as  to  the  results 
of  their  various  efforts  to  relieve  unemployment,  declared  that  "  the 
only  cure  for  unemployment  is  employment."  Relief  even  faintly 
suggestive  of  charity  was  found  to  be  a  bad  policy — except  as  a  last 
unavoidable  resort. 

Sixty-six  cities  contributed  their  conclusions  as  to  the  proper 
methods  for  relief  and  prevention.  Of  these  23  laid  stress  upon 
expansion  of  public  works  as  the  most  successful  measure  within 
their  experience  of  meeting  the  unemployment  emergency;  16  em- 
phasized temporary  jobs  and  the  giving  of  material  relief,  where 
necessary,  only  when  earned;  15  regarded  proper  community  or- 
ganization as  a  prime  necessity ;  14  were  aided  by  regularization  of 
industry — short  day,  short  week,  making  to  stock,  repairs  and  im- 
provements, etc.,  and  8  got  especially  good  results  through  public 
employment  bureaus.  A  few  scattering  cities  like  Hartford  and 
Indianapolis  found  that  sending  idle  men  to  farms  had  been  helpful. 
Most  cities  made  use  of  all,  or  nearly  all,  of  these  measures  in  com- 
bination in  making  most  effective  headway  against  distress  due  to 
unemployment. 

Many  cities,  reporting  definitely  that  they  had  drawn  upon  the 
"  STANDARD  RECOMMENDATIONS  FOR  THE  RELIEF  AND  PREVENTION 
OF  UNEMPLOYMENT  "  issued  by  the  American  Association  for  Labor 
Legislation,  in  dealing  with  unemployment,  listed  these  activities  on 
the  successful  side  of  the  community  ledger. 

Avoid  bread-lines,  soup-kitchens,  money  gifts  or  other  indis- 
criminate giving  of  charitable  relief!  That  is  the  warning 
coming  from  nearly  all  cities  that  had  any  experience  with  the  de- 
moralizing results  of  "  pauperization."  Especially  vigorous  con- 
demnation of  these  methods  came  from  24  cities,  including  such  im- 
portant industrial  centers  as  Pittsburgh,  Toledo,  Pawtucket,  Tacoma, 
Milwaukee,  Denver,  New  Haven,  Rockford,  New  Orleans,  New 
Bedford,  Springfield,  Worcester,  Mass.,  Manchester,  N.  H.,  New 
York  City,  Syracuse,  Dayton,  Fall  River  and  Savannah.  Undue 
publicity  of  relief  plans  or  funds  was  condemned  as  harmful  in 
reports  from  9  cities,  including  San  Francisco,  New  Bedford,  Syra- 


216  American  Labor  Legislation  Review 

cuse,  Cleveland,  Spokane,  Flint,  Michigan,  Newport  and  St.  Louis. 
From  11  cities  came  scattering  recommendations  of  measures  to  be 
particularly  avoided,  such  as  giving  work  to  women  instead  of  to 
men  with  families,  the  creation  of  new  organizations  until  existing 
machinery  has  proved  inadequate,  "  politics  "  or  antagonism  between 
groups,  permits  to  beg  or  peddle  on  the  streets,  obviously  created 
or  "  made  "  work,  and  "  hysteria."  Labor  organizations  contended 
that  over-production,  overtime  or  longer  working  hours  tended  to 
aggravate  unemployment. 

On  the  positive  side,  interesting  campaigns  were  carried  on  in 
several  cities.  That  undertaken  in  Erie,  Pa.,  is  suggestive.  There 
the  Associated  Charities,  besides  drawing  upon  the  "  RECOMMEN- 
DATIONS/'' carried  on  emergency  activities  that  were  especially  de- 
signed to  focus  public  attention  upon  constructive  measures  of  re- 
lief. On  January  29,  1921,  the  following  general  appeal  in  mimeo- 
graphed form  was  circulated  throughout  the  city : 

UNEMPLOYMENT 
WHAT  CAN  WE  Do  ABOUT  IT? 

Where  there  is  no  Fire  Department  every  citizen  must  be  ready  to  do  his 
part  in  case  of  fire,  and  since  no  adequate  preparation  has  been  made  for 
meeting  unemployment,  we  all  must  render  such  emergency  service  as  we  can. 

Employers  should  make  every  effort  to  continue  in  operation.  They 
should  retain  just  as  many  of  their  employees  on  the  pay  rolls  as  they  possibly 
can,  giving  part  time  employment  in  preference  to  laying  men  off.  Employees 
who  live  in  the  city  and  those  who  have  families  dependent  upon  them  should 
be  given  first  consideration.  In  some  cases  men  of  family  might  be  taken  on 
and  men  without  dependents  dropped  to  make  room  for  them. 

Employees,  until  the  emergency  is  past,  should  lend  support  to  part 
time  work,  or  even  to  longer  hours  or  reduced  wages,  where  only  this  will 
enable  the  employer  to  continue  operation.  Work  of  any  and  every  kind  should 
be  sought  as  preferable  to  charity.  Those  who  are  in  need  should  be  cared 
for  by  their  unions  or  by  fellow  workmen  if  possible. 

City  and  county  departments  should  see  that  all  public  work  which 
it  is  possible  to  do  now  is  started  at  once  and  that  it  is  done  by  those  who 
have  no  other  means  to  tide  them  over. 

Landlords  should  be  lenient  with  tenants  who  are  out  of  work  if  they 
have  always  been  prompt  in  payment  heretofore  and  are  known  to  be  honest. 
Levies  should  not  be  made  unless  there  is  reason  to  believe  that  the  tenant 
will  not  pay  up. 

Tradesmen  should  discourage  unnecessary  expenditures  by  those  out 
of  work,  but  for  the  purchase  of  necessities  they  should  extend  extra  credit 
as  far  as  their  capital  will  permit  to  those  whom  they  know  they  can  trust. 
Prices  should  be  reduced  wherever  possible,  to  keep  goods  moving  and  stimu- 
late production. 

Relatives  should  recognize  the  claims  of  kinship,  and  as  far  as  their 


Unemployment  Survey,  1920-21  217 

resources  permit  should  see  that  those  related  to  them  are  not  forced  to  ask 
aid  from  strangers. 

Friends  and  neighbors  should  take  thought  for  those  who  are  un- 
employed and  do  the  various  turns  that  friendliness  and  neighborliness  will 
suggest.  Loans  might  be  offered  by  those  who  have  savings.  Liberty  bonds 
might  be  purchased  at  par  from  those  who  are  obliged  to  sell.  Grocery 
accounts  or  rent  bills  might  be  guaranteed  by  those  who  own  property  for 
others  who  have  no  property  to  make  their  credit  good. 

Churches  should  make  an  effort  to  care  for  the  steady  workers  among 
their  members  by  loan  funds  or  by  direct  gifts  from  their  charity  funds. 
Money  for  this  purpose  should  be  raised  quietly  and  should  be  disbursed 
without  the  names  of  the  beneficiaries  becoming  known  except  to  those  con- 
cerned in  the  actual  disbursement. 

Everybody  must  undertake  to  see  that  employment  is  offered  from 
every  possible  source.  Odd  jobs,  clean-ups,  repairs,  preparations  for  building, 
and  many  other  things  can  be  done  now.  Even  if  it  costs  a  little  more,  the 
difference  represents  the  most  efficient  form  of  charity  and  embodies  real 
patriotism.  Any  jobs  found  may  be  reported  to  the  State  Employment  Bureau, 
where  they  will  be  assigned  to  those  who  need  them  most., 

Welfare  agencies,  whatever  their  special  lines  of  work,  must  recog- 
nize that  unemployment  can  soon  defeat  all  their  efforts,  and  should  give 
serious  attention  to  warding  off  this  threatened  danger.  They  are  in  touch 
with  those  whose  resources  are  most  limited  and  to  whom  unemployment  is 
most  likely  to  mean  actual  privation.  Their  workers  should  take  up  each  indi- 
vidual case  on  its  merits  and,  after  analyzing  it,  be  in  a  position  to  suggest 
workable  plans  for  bridging  the  period  of  unemployment. 

The  Associated  Charities  will  care  for  families  who  have  no  one  else 
to  depend  upon,  and  for  those  who  are  difficult  to  care  for  because  of  shift- 
lessness,  unreliability,  etc.  But  no  relief  agency  can  act  as  a  substitute  for 
employers  in  offering  work,  nor  guarantee  payment  of  the  rent  and  grocery 
bills  of  all  the  unemployed.  To  do  this  would  swamp  any  agency  before  it 
was  fairly  started.  Even  to  investigate  and  report  on  more  than  a  small 
percentage  of  those  out  of  work  would  be  impossible  with  the  present  staff. 
However,  the  Associated  Charities  can  and  will  do  its  part,  and  if  everyone 
else  will  do  the  same,  the  period  of  unemployment  can  be  passed  without 
unnecessary  hardship  to  anyone."  (Here  was  inserted  extracts  from  the 
"STANDARD  RECOMMENDATIONS  FOR  THE  RELIEF  AND  PREVENTION  OF  UNEM- 
PLOYMENT" issued  by  the  American  Association  for  Labor  Legislation.) 

If  preparation  had  been  made  in  advance,  we  could  now  have  public 
works  ready  to  begin  operation  on  a  scale  sufficient  to  insure  every  able-bodied 
man  a  job.  The  probability  of  general  unemployment  being  thus  removed, 
business  in  most  lines  might  have  felt  little  slackening.  Unemployment  insur- 
ance, which  could  have  been  carried  easily  during  the  years  of  steady  work, 
would  have  prevented  suffering  now,  and  would  also  have  kept  up  the  buying 
power  of  the  public,  thus  hastening  the  return  of  employment. 


STANDARD  RECOMMENDATIONS 

FOR    THE 

RELIEF  AND  PREVENTION  OF  UNEMPLOYMENT 


REPORTS  received  in  the  course  of  an  investigation  by  the 
American  Association  for  Labor  Legislation  from  more 
than  300  organizations  and  individuals  in  115  different  com- 
munities, point  to  the  following  recommendations  on  measures 
to  be  taken  and  to  be  avoided  in  the  relief  and  prevention  of 
unemployment : 

1.     ORGANIZATION 

Organize  the  community  as  long  as  possible  before  unemploy- 
ment becomes  acute,  including  any  necessary  reorganization  or 
coordination  of  existing  agencies.  The  appointment  of  an  unem- 
ployment committee  by  the  governor  or  by  the  mayor  if  improper 
political  influences  is  guarded  against  insures  semi-official  stand- 
ing and  greater  prestige.  Include  in  the  membership  all  classes 
concerned,  such  as  employers,  workingmen,  public  officials,  social 
workers,  civic  leaders  and  representatives  of  churches,  lodges  and 
women's  clubs.  To  carry  out  preventive  measures,  permanent 
organization,  not  temporary  activity  during  a  crisis,  is  essential. 

2.     EDUCATION 

Upon  the  basis  of  careful  information  gathered  from  employ- 
ment offices,  relief  agencies,  and  all  other  available  sources, 
bring  the  facts  of  the  unemployment  situation  home  to  every 
citizen.  Emphasize  civic  and  industrial  responsibility.  Avoid 
"  the  ostrich  policy  of  refusing  to  face  trie  facts  on  the  one 
hand  and  hysterical  exaggeration  of  facts  on  the  other." 

3.     EMERGENCY  RELIEF 

Avoid  duplicating  the  work  of  existing  organizations.  Do 
not  advertise  the  existence  of  large  relief  funds  or  other  pro- 
visions for  relief  without  work,  or  give  indiscriminate  relief  to 
able-bodied  men.  Except  as  a  last  resort,  discourage  the  start- 
ing of  bread  lines,  bundle  days,  soup  kitchens  and  similar 
measures.  As  far  as  possible  supply  aid  by  means  of  employment, 
at  standard  rates,  but  on  part  time,  to  encourage  early  retuin  to 
regular  occupation.  Open  workshops  and  secure  odd  jobs  from 
householders.  Do  not  provide  work  for  housewives  who  are 
not  ordinarily  wage-earners,  instead  of  for  their  jobless  husbands. 
For  the  homeless,  provide  a  municipal  lodging  house,  with  a 
work  test,  or  a  cooperative  lodging  house  under  intelligent  super- 
vision and  leadership.  Abolish  the  "  passing  on  "  system,  but 
do  not  make  provision  for  non-residents  at  the  expense  of 
resident  unemployed  family  men. 

4.     SEPARATION  OF  UNEMPLOYABLE  AND  UNEMPLOYED 

Differentiate  the  treatment  of  the  unemployable  from  that 
of  the  unemployed.  Develop  appropriate  specialized  treatment 
based  on  the  continuous  work  of  trained  social  investigators  for 
the  inmates  of  the  municipal  lodging  house.  Provide  adequate 
facilities  for  the  care  and  treatment  of  the  sick,  the  mentally 
defective  and  the  aged.  Develop  penal  farm  colonies  for  shirks 
and  vagrants,  training  colonies  and  classes  for  the  inefficient,  and 
special  workshops  for  handicapped  and  sub-standard  workers. 


5.     INDUSTRIAL  TRAINING 

Provide  industrial  training  classes  with  scholarships  for 
unemployed  workers.  . 

6.    EMPLOYMENT  EXCHANGES 

If  one  is  not  already  in  existence,  open  an  employment  ex- 
change to  centralize  the  community's  labor  market,  using  private 
contributions  if  necessary  in  the  initial  stages.  Beware  of  poor 
location  and  insufficient  appropriations,  of  political  appointees 
and  general  inactivity.  Do  not  start  temporary  philanthropic 
exchanges  in  times  of  depression  if  there  is  a  public  bureau  which 
can  be  made  efficient.  Stimulate  the  cooperation  of  citizens  to 
improve  the  existing  public  exchange  and  to  coordinate  the  work 
of  non-commercial  private  bureaus.  Secure  adequate  legislation 
establishing  permanent  state  or  municipal  bureaus,  extending 
joint  city-state-federal  control  in  their  administration,  and  regu- 
lating private  agencies.  Work  for  federal  legislation  and 
appropriations  to  develop  a  national  system  of  employment 
exchanges.  7  PUBLIC  WORK 

Start  or  push  forward  special  public  work,  using  private 
contributions  in  time  of  urgent  need  if  public  funds  cannot  be 
obtained.  This  should  not  be  "  made  "  or  unnecessary  work,  but 
needed  public  improvements  in  as  great  variety  as  possible,  so 
as  to  furnish  employment  to  other  sorts  of  persons  besides  un- 
skilled laborers.  Give  preference  to  resident  heads  of  families 
if  there  is  not  work  enough  for  all  applicants.  Employ  for  the 
usual  hours  and  wages,  but  rotate  employment  by  periods  of 
not  less  than  three  days.  Supervise  the  work  carefully  and 
insist  upon  reasonable  standards  of  efficiency.  To  avoid  the 
difficulties  of  emergency  action  make  systematic  plans  for  the 
regular  concentration  of  public  work  in  dull  years  and  seasons 
by  special  provisions  in  the  tax  levy  or  by  other  appropriate 
method.  Urge  the  repeal  of  laws  restricting  cities  to  contract 
work.  Secure  the  aid  of  state  and  national  officials  in  stimu- 
lating local  action.  Steady  employment  of  the  regular  force, 
retaining  employees  on  part  time  in  preference  to  reducing  their 

numbers.  0      ^ 

8.     REGULARIZATION 

In  times  of  depression,  urge  the  use  of  regular  employees  in 
making  repairs  and  improving  the  plant,  and  the  policy  of  part 
time  employment  rather  than  reduction  in  numbers.  Do  not 
rely  upon  general  appeals  to  "  Do  it  now,"  "  Hire  a  man,"  and 
the  like,  addressed  to  the  public  at  large  without  definite  sug- 
gestions as  to  method.  Rouse  employers  to  the  importance  of 
the  problem  and  the  advantages  of  regularization.  Stimulate 
careful  planning  for  this  purpose  by  experts  as  part  of  the 
regular  routine  of  business  management.  Encourage  the  forma- 
tion of  employment  managers'  associations. 

9.     UNEMPLOYMENT  INSURANCE 

Work  for  the  establishment  by  legislation  of  a  system  of  un- 
employment insurance,  supported  by  contributions  from  em- 
ployers, as  the  most  just  and  economical  method  for  the  proper 
maintenance  of  the  necessary  labor  reserves  and  as  supplying  the 
financial  pressure  needed  to  secure  the  widespread  regulariza- 
tion of  industry. 


State  Legislation  to  Plan  Public  Works 
Against  Unemployment 

CALIFORNIA  has  just  taken  an  important  step  toward  the 
long-time,  advance  planning  of  public  works  to  combat 
unemployment.  The  1921  legislature  enacted  a  law  providing 
for  "  the  extension  of  the  public  works  of  the  state  *  *  * 
during  periods  of  extraordinary  unemployment  caused  by 
temporary  industrial  depression  and  regulating  employment 
therein." 

The  new  "  preparedness "  plans  in  California  require  that 
the  board  of  control  "  ascertain  and  secure  from  the  various 
departments,  bureaus,  boards  and  commissions  of  the  state  ten- 
tative plans  for  such  extension  of  the  public  works  of  the  state 
as  shall  be  best  adapted  to  supply  increased  opportunities  for 
advantageous  public  labor  during  periods  of  temporary  unemploy- 
ment. 

The  bureau  of  labor  statistics,  in  co-operation  with  the 
immigration  and  housing  commission  and  the  industrial  wel- 
fare commission,  is  required  "  to  keep  constantly  advised  of  in- 
dustrial conditions  throughout  the  state  as  affecting  the  employ- 
ment of  labor;  and  whenever  it  shall  be  represented  to  the  said 
bureau  by  the  governor  of  the  state,  or  the  said  bureau  shall 
otherwise  have  reasons  to  believe,  that  a  period  of  extraordinary 
unemployment  caused  by  industrial  depression  exists  in  the  state, 
it  shall  be  the  duty  of  the  said  bureau  to  immediately  hold  an 
inquiry  into  the  facts  *  *  *  and  report  to  the  governor  *  *  * 
whether,  in  fact,  such  condition  does  exist." 

In  case  it  is  thus  found  that  extraordinary  unemployment 
does  exist,  the  board  of  control  is  "  authorized  to  make  such 
disposition  and  distribution  of  the  available  emergency  fund 
among  the  said  several  departments,  bureaus,  boards  and  com- 
missions of  the  state  for  such  extension  of  the  public  works  of 
the  state  under  the  charge  or  direction  thereof,  including  the 
purchase  of  materials  and  supplies  necessary  therefor,  as  shall,  in 
the  judgment  and  discretion  of  the  said  board  of  control,  be  best 
adapted  to  advance  the  public  interest  by  providing  the  maxi- 
mum of  public  employment,  in  relief  of  the  existing  conditions 
of  extraordinary  unemployment  consistent  with  the  most  useful, 
permanent  and  economic  extension  of  the  works." 

Here  is  a  notable  effort,  in  a  year  of  general  legislative 
reaction,  to  make  permanently  effective  a  cardinal  principle  of 
unemployment  prevention — prevision.  What  California  has  done, 
as  a  state,  may  well  serve  as  a  stimulus  not  only  to  other  states 
but  also  to  municipalities  and  to  private  industry. 


The  Need  of  Legal  Standards  of  Protec- 
tion for  Labor 


BY  REV.  JOHN  A.  RYAN,  D.  D. 

Professor  of  Industrial  Ethics,   Catholic  University  of  America; 

Director  Social  Action  Department,  National  Catholic 

Welfare  Council;  Author  of  "A  Living 

Wage"  " Distributive  Justice,"  etc. 


ANY  conception  of  protective  standards  for  labor  is  funda- 
mentally the  conception  of  the  dignity  of  personality.  It  is 
the  notion  that  the  individual,  the  human  person,  is  of  intrinsic 
worth.  The  teaching  of  Christianity  made  the  individual  something 
sacred  and  indestructible.  This  idea  is  older  than  Christianity,  but 
it  has  been  greatly  developed  by  Christianity.  It  is  the  idea  that 
Kant  had  when  he  said  that  the  human  person  is  an  end  in  himself, 
not  a  means  to  anything  else.  Therefore,  industry  exists  for  man, 
not  man  for  industry.  And  industry  exists  for  every  man,  for  all 
persons  who  are  in  any  way  connected  with  it,  or  in  any  way  de- 
pendent upon  it. 

The  American  Association  for  Labor  Legislation — holding  to  this 
idea  of  the  human  being  as  possessing  intrinsic  worth,  with  a  soul 
to  be  developed  and  a  body  to  be  safeguarded, — proceeds  on  the 
political  principle  that  some  state  intervention  in  industrial  affairs  is 
desirable.  Indeed,  the  principle  of  state  intervention  itself  no  longer 
stands  in  need  of  defense ;  for  the  laissez-faire  theory  is  universally 
discarded.  Nevertheless,  every  important  proposal  of  legislative 
action  in  this  field  meets  some  opposition  on  the  ground  that  it  is  not 
justified  by  general  principles,  or  that  it  is  "  socialistic."  This  is 
particularly  true  of  the  present  time  when  the  forces  of  reaction 
appear  to  be  in  control  both  of  legislation  and  of  public  opinion. 
The  greatest  obstacle,  just  now,  to  a  realization  of  protective 
standards  for  labor — and  I  mean  reasonable  legal  standards — is 
industrial  autocracy. 

The  principles  and  program  of  labor  legislation  which  this 
Association  has  fostered  are  not  extreme.  They  do  not  call  for 
more  than  a  certain  reasonable  minimum  of  opportunity. 

The  Principle  of  Legal  Standards 

It  is  the  function  of  the  state  to  provide  for  the  common  good. 
Now  the  common  good  means  not  only  society  as  a  whole,  but  every 


222  American  Labor  Legislation  Review 

important  class  of  the  population.  Some  political  thinkers  seem  to 
believe  that  in  order  to  justify  legislation  for  a  class  it  is  necessary 
to  show  a  more  or  less  direct  benefit  that  will  finally  accrue  to  the 
general  public.  While  it  is  true  that  in  the  long  run  society  as  a 
whole  will  suffer  through  the  evils  inflicted  upon  any  considerable 
class,  no  such  connection  is  necessary  to  justify  legislation  on  behalf 
of  a  particular  class  or  section  of  the  community.  The  correct  prin- 
ciple of  state  intervention  has  nowhere  been  better  formulated  than 
in  the  statement  of  Pope  Leo  XIII :  "  Whenever  the  general  in- 
terest or  any  particular  class  suffers  or  is  threatened  with  mischief 
which  can  in  no  other  way  be  met  or  prevented,  the  public  authority 
must  step  in  to  deal  with  it." 

The  state  exists  for  the  sake  of  individuals;  individuals  do  not 
exist  for  the  sake  of  the  state.  Therefore,  it  is  the  duty  of  the  state 
so  far  as  possible,  to  promote  the  welfare  of  all  individuals  by  what- 
ever means  are  necessary  and  appropriate.  One  of  the  most  effective 
methods  of  furthering  the  welfare  of  particular  classes  of  individuals 
is  through  legislation  affecting  economic  conditions.  This  is  class 
legislation,  but  no  other  kind  of  legislation  is  suitable  in  a  society 
where  men  are  divided  into  classes  and  have  different  class  interests. 
Practically  all  general  laws  affect  the  different  economic  classes  dif- 
ferently. Very  few  laws  can  be  equally  beneficial  to  all  classes. 
Hence  the  necessity  of  deliberate,  honest  and  fair  class  legislation. 

The  alternative  to  industrial  legislation  is  trade  union  action. 
If  labor  organizations  could  obtain  for  the  working  people  all 
the  protection  and  benefits  that  they  need,  industrial  legislation 
would  be  unnecessary  and  undesirable.  It  is  better  that  men 
sho'uld  do  things  for  themselves  than  that  the  state  should  do 
things  for  them.  But  we  know  from  abundant  experience  that 
the  labor  unions  of  the  United  States  are  not  able  to  effect  the 
reforms  in  industrial  conditions  which  are  urgently  demanded. 
We  must  have  recourse  to  the  state. 

Industrial  Autocracy 

Over  against  the  philosophy  of  human  standards,  we  have  the 
philosophy  of  industrialism. 

This  is  the  theory  that  neither  labor  unions  nor  legislation  is 
necessary.  The  masters  of  industry  insist  that  they  alone  know  what 
is  good  both  for  their  own  interests  and  for  the  interests  of  their 
employees.  At  best,  this  theory  means  a  benevolent  feudalism — an 
industrial  autocracy — which  is  impossible  in  this  democratic  age. 

I  have  lately  been  reading,  in  those  three  remarkable  volumes  by 
J.  L.  and  Barbara  Hammond,  a  description  of  the  industrial  revolu- 


Need  of  Legal  Standards  223 

tion  in  England  during  the  period  between  1760  and  1832.  I  have 
been  interested  not  so  much  in  their  intensive  descriptions  of  the 
awful  conditions  in  the  factories  and  the  factory  towns,  the  poverty 
and  suffering  of  the  workers  and  the  apparent  inhumanity  of  the 
more  powerful  classes,  as  in  their  interpretation  of  the  philosophy 
of  that  age — the  mental  attitude  of  the  dominant  classes. 

The  rich  masters  of  the  industrial  society  of  that  day,  as  ex- 
plained by  the  Hammonds,  were  able  to  take  an  attitude  of  in- 
tellectual calmness  toward  all  this  human  suffering  because  of  two 
or  three  industrial  theories  which  they  had  borrowed,  and  somewhat 
perverted  in  the  borrowing,  from  the  economists : 

First,  that  there  was  an  unseen  hand  which  directed  every  man 
in  pursuing  his  own  selfish  purposes  to  promote  the  common  good. 
That  is  a  very  common  and  comforting  doctrine.  No  matter  how 
selfish  a  man  is,  what  he  does  for  himself  is  also  useful  for  the  com- 
munity. 

Second,  that  there  were  natural  laws  which  fixed  wages  at  about 
the  level  of  subsistence ;  so,  there  was  no  use  in  trying  to  ignore 
nature's  laws  by  expecting  or  hoping  that  men  could  have  more  than 
a  wage  barely  sufficient  for  subsistence. 

Third,  that  in  any  case  there  was  a  certain  fixed  amount  of  money 
available  for  paying  wages  in  any  one  year — the  wage  fund.  There- 
fore, if  one  class  of  workers  happened  to  get  proportionately  more 
than  they  got  the  year  before,  it  meant  that  some  other  class  must 
be  satisfied  with  less. 

Such  was  the  philosophy  which  dominated  the  industrial  classes 
of  that  time,  and  made  them  so  apparently  calloused  and  indifferent 
to  the  sufferings  of  humanity. 

Have  we  advanced  very  far  beyond  that  philosophy?  One  may 
well  wonder,  especially  as  one  reads  the  current  metropolitan  press. 
In  these  papers  there  is  continual  insistence  upon  the  necessity  of 
giving  industry  an  opportunity  to  become  again  what  it  was  before 
the  war — exactly  what  it  was  five  or  six  years  ago!  There  is  in- 
sistence upon  the  necessity  of  reducing  taxes ;  especially  by  entirely 
wiping  out  the  excess  profits  taxes  and  by  lowering  the  rates  of 
super-taxes  on  the  higher  incomes,  in  order  that  business  men  will 
have  sufficient  money  to  invest  in  different  forms  of  capital  and  to 
provide  employment. 

This  is,  it  seems  to  me,  only  a  slightly  modified  form  of  the  wage 
fund  theory ;  for  it  contends  that  if  capital  is  not  making  large  profits, 
there  will  not  be  sufficient  money  for  adequate  wages. 

The  old  theory  that  wages  should  be  about  at  the  level  of  sub- 
sistence has  been  abandoned  to  some  extent  in  the  philosophy  of  in- 


224  American  Labor  Legislation  Reiriew 

dustry,  but  not  entirely.  It  still  prevails  with  regard  to  unskilled 
labor.  At  least  it  is  held  in  some  powerful  quarters  of  the  industrial 
system.  A  recent  editorial  in  the  Wall  Street  Journal  is  particularly 
enlightening  on  this  point : 

When  the  real  readjustment  comes  the  unskilled  worker  finishes  where  he 
belongs — at  the  bottom  of  the  list.  He  will  be  able  to  live  on  $2  a  day  when 
he  is  lucky  enough  to  get  that  amount  regularly.  *  *  *  The  cost  of  living 
will  adjust  itself.  The  Labor  Bureau  will  give  up  publishing  nonsense  about 
$2,600  a  year  minimum  for  a  fancied  "  family  of  five."  The  unskilled  worker 
will  thank  goodness  that  he  has  no  family  of  five  or,  indeed,  anybody  but 
himself  to  support ;  nor  will  any  employer  pay  him  on  the  basis  of  such  father- 
hood as  the  bankrupt  and  discredited  Interchurch  World  Movement  absurdly 
proposed  in  its  gratuitous  inquiry  into  the  steel  strike. 

That  is  the  Wall  Street  Journal!  For  calm  brutality  it  exceeds 
anything  that  I  have  ever  before  seen  in  the  literature  of  American 
capitalism. 

It  is  industrial  autocracy  that  is  mainly  to  blame  for  the  per- 
sistence of  this  philosophy  of  industrialism  which  subordinates  the 
man  to  the  machine,  the  man  to  the  system, — because  this  philosophy 
does  subordinate  not  merely  the  wage-earner  but  the  employer  and 
everybody  else  as  well  to  the  fetish  of  production.  The  system  must 
keep  on  functioning  in  terms  of  output  regardless  of  what  it  does  to 
human  beings. 

Industrial  autocracy  must  be  held  mainly  responsible  because  the 
attitude  toward  the  human  side  of  industry,  as  expressed  in  the  con- 
temptible editorial  in  the  Wall  Street  Journal,  is  on  the  whole  de- 
termined by  a  few  powerful  industrial  groups. 

We  have  had  a  recent  convincing  illustration  of  that  side  of  in- 
dustrial autocracy  in  the  hearings  of  the  Lockwood  committee  in 
New  York.  Let  us  examine  briefly  what  was  brought  out  at  this 
investigation  into  the  building  situation,  particularly  in  the  light  of 
the  so-called  open  shop  movement.  At  the  very  outset  of  this  cam- 
paign, it  seemed  to  me,  and  some  of  my  associates  in  the  Social 
Action  Department  of  the  National  Catholic  Welfare  Council,  to  be 
a  movement  for  the  destruction  of  the  labor  unions.  All  the  evidence 
since  then  has  confirmed  us  in  that  belief.  The  testimony  before  the 
Lockwood  committee  proves  it  to  be  abundantly  true  in  the  power- 
ful steel  industry.  These  industrial  autocrats  profess  to  be  in  favor 
of  an  open  shop,  to  give  to  the  man  who  does  not  belong  to  the  union, 
opportunity  to  work  when  and  where  he  pleases.  They  refuse  to 
deal  with  the  union  in  any  sense.  More  than  that,  in  the  steel  in- 
dustry there  is  an  association  one  of  whose  functions  is  to  see  that 
only  non-union  foremen  are  employed;  that  the  non-union  foremen 
as  far  as  possible  do  not  employ  any  union  men.  In  other  words, 
their  open  shop  means  a  closed  shop  against  the  union. 


Need  of  Legal  Standards  225 

The  different  steel  concerns  contend  also  for  freedom  of  associa- 
tion for  themselves — to  combine  for  fixing  wages  and  for  presenting 
a  solid  front  against  unionism.  They  deny,  as  one  of  their  repre- 
sentatives on  the  stand  denied,  the  right  of  the  workers  to  combine 
to  fix  wages  or  to  adopt  a  common  policy  toward  non-union  workers. 
When  Mr.  Untermyer,  counsel  to  the  committee,  asked  "  But  you 
assert  for  your  association  of  employers  something  that  you  deny 
the  workers  ?"  this  man  replied,  "  Yes,  that  is  what  it  amounts  to." 

These  masters  of  steel  denounce  the  boycott  as  being  something 
un-American  and  unjust — when  employed  by  labor.  They,  them- 
selves, unite  to  boycott  the  building  contractors  of  New  York  and 
Philadelphia  who  will  not  subscribe  to  their  program  against  the 
unions.  One  of  them  even  admitted  that  if  it  were  thought  neces- 
sary to  attain  their  ends,  they  would  extend  that  boycott  to  all  the 
builders  in  the  United  States. 

One  of  the  great  steel  corporations  has  from  the  beginning  pro- 
fessed high  devotion  to  the  doctrine  of  publicity ;  and  yet  the  secre- 
tary of  an  association  of  steel  producing  concerns  testified  that  he 
had  been  instructed  to  omit  from  the  minutes  of  a  certain  meeting, 
at  which  a  reprehensible  policy  was  agreed  upon,  the  fact  that  this 
particular  steel  corporation  had  participated. 

A  conclusive  indication  of  the  autocracy  in  industry  is  the  sincer- 
ity of  the  masters.  And  that  is  the  worst  feature.  -They  believe  that 
autocracy  is  best  not  only  for  themselves  but  for  the  workers,  just 
as  the  powerful  industrial  classes  of  a  century  ago  justified  them- 
selves on  the  ground  that  they  were  making  better  provision  for  the 
workers  than  the  latter  could  make  for  themselves.  The  great  over- 
lords in  the  steel  industry,  as  in  many  others,  appear  to  believe  this 
sincerely.  One  of  them,  Mr.  Gary,  said  that  he  believed  it  was 
better  for  the  workmen  not  to  belong  to  a  union;  that  he  would  do 
what  was  right  for  them,  and  could  do  what  was  right  for  them  more 
successfully  than  they  could,  themselves. 

Even  if  an  industrial  autocracy  of  this  sort  were  benevolent,  it 
would  still  be  intolerable.  But  we  know  that  it  is  not  a  good  thing 
for  labor.  Witness  the  Interchurch  World  Movement  Committee's 
report  concerning  conditions  in  the  steel  industry.  Bear  in  mind  its 
findings  as  to  the  extent  of  the  twelve-hour  day  and  the  seven-day 
week,  and  even  as  to  wages.  It  is  true  that  wages  were  increased  in 
the  steel  industry  since  1914  more-  than  the  increase  in  the  cost  of 
living;  but  an  important  qualification  of  that  apparent  liberality  is 
the  fact  that  wages  must  have  been  terribly  low  for  the  unskilled 
workers  prior  to  1914 ! 


226  American  Labor  Legislation  Review 

The  theory  that  these  industrial  autocrats,  if  they  are  only  let 
alone,  are  going  to  do  for  the  workers  what  is  best  for  them  does 
not  harmonize  with  the  facts.  Even  if  it  did,  we  in  America  do  not 
want  to  live  under  that  kind  of  an  industrial  regime  any  more  than 
we  want  to  live  under  a  political  autocracy. 

Need   For  Labor  Legislation 

History  and  experience  tell  us  what  would  happen  to  the 
workers  if  success  should  attend  the  present  campaign  to  cripple  or 
destroy  the  trade  unions.  The  sum  of  the  situation  is  that  the  unions 
must  fight  as  hard  as  they  know  how  against  the  attempt  to  destroy 
them,  and  all  friends  of  protective  standards  for  labor  must  redouble 
their  efforts  to  improve  conditions  of  employment  through  proper 
legislation. 

We  need  labor  legislation — the  establishment  of  legal  standards 
— because  we  cannot  trust  industrial  autocracy  to  abolish  existing 
industrial  abuses.  We  cannot  leave  it  all  to  the  trade  unionists. 
For  myself,  I  have  much  sympathy  with  the  viewpoint  that  where 
private  initiative  can  accomplish  anything  better  than  or  as  well  as 
government  can  accomplish  it,  we  should  prefer  private  initiative; 
so,  if  the  workers'  organizations  could  bring  about  and  maintain  pro- 
tective standards  there  would  be  no  need  of  the  legislative  method. 
Indeed,  the  former  would  be  preferable  because  it  is  always  better 
for  human  beings  to  do  things  for  themselves  than  to  have  things 
done  for  them  by  others.  That,  after  all,  is  democracy.  But  we 
know  that  the  trade  unions  cannot  accomplish  all  that  is  needed  on 
a  widespread,  uniform  basis  and  within  a  reasonable  time.  The 
generation  of  unskilled  workers  now  living  who  have  not  sufficient 
wages,  who  have  not  sufficient  security  of  employment,  who  have  not 
sufficient  safeguards  against  sickness,  accident  and  old  age,  are  of 
quite  as  much  importance  as  the  next  generation,  whose  condition 
may  possibly  by  that  time  be  improved  through  the  trade  unions. 

There  are  many,  doubtless,  who  are  somewhat  discouraged  at 
this  particular  time  because  Congress  and  the  legislatures  of  many 
states  are  reactionary.  Nevertheless,  we  can  draw  encouragement 
from  the  probability  that  the  lessons  of  history  will  continue  to  hold 
good ;  that  reaction  will  go  to  such  an  extreme  and  will  be  so  crude 
and  unwise  in  wielding  its  power,  that  we  shall  before  long  have  a 
reaction  against  reaction.  The  pendulum  will  swing  back,  and  the 
average  man  who  wants  to  be  fair  will  again  find  the  way  clear  for 
the  further  advancement  of  scientific  legislation  that  must  be  adopted 
if  we  are  to  uphold  the  standards  of  human  dignity  and  human 
decency  among  the  laboring  people. 


Face  the  Labor  Issue ! ' 


BY  THOMAS  L.  CHADBOURNE 


1AM  more  concerned  to  analyze  this  nation's  indifference  to  the 
three  great  fears  that  darken  the  lives  of  the  poor — the  fear  of 
ill  health,  of  unemployment,  and  of  want  in  old  age — than  T  am  in 
the  fact  that  the  American  Association  for  Labor  Legislation  was 
responsible  for  the  federal  bill  protecting  workmen  in  match  fac- 
tories from  a  loathsome  occupational  disease.  I  am  more  interested 
to  find  out  why  obstacles  were  thrown  in  the  way  of  legislation  to 
protect  the  compressed-air  workers  in  underground  work  than  I  am 
in  the  fact  that  we  finally  obtained  this  legislation.  The  reasons  for 
the  indescribable  slowness  and  unspeakable  difficulties  experienced 
in  securing  legislation  to  prevent  lead  poisoning  are  of  more  moment 
to  me  *  *  *  than  is  the  fact  that  we  were  instrumental  in 
securing  such  legislation. 

The  reason  why  this  nation  was  thirty-six  years  behind  Germany 
and  twenty  years  behind  Great  Britain  in  adopting  compulsory  acci- 
dent insurance  for  employees  is,  in  my  judgment,  worthy  of  a  great 
deal  more  consideration  than  the  fact  that  we  drafted  and  aided  the 
passage  of  a  model  bill  for  workmen's  compensation  for  the  half 
million  civilian  employees  of  the  federal  government. 

It  is  a  splendid  thing  to  feel  that  we  have  secured  one  day  of  rest 
for  factory  employees  in  the  most  important  industrial  states  in  the 
union  and  laid  a  splendid  foundation  for  the  extension  of  this  prin- 
ciple, but  even  this  does  not  impress  me  so  much  as  the  fact  that  we 
are  still  without  insurance  for  wage-earners  against  illness,  while 
Germany  has  had  such  insurance  for  thirty-seven  years  and  Great 
Britain  has  had  it  for  eight  years. 

It  is  gratifying  that  this  Association  has  had  more  to  do  with 
creating  state  industrial  commissions  than  any  other  organization  in 
the  United  States,  and  that  these  commissions  are  composed  of  the 
men  who  see  the  procession  of  the  widows  and  cripples  of  industry 
and  who  inspect  the  work-places  for  the  purpose  of  preventing  acci- 

1  From  presidential  address  delivered  at  the  fourteenth  annual  meeting  of 
the  American  Association  for  Labor  Legislation,  New  York  City,  December 
29,  1920. 


228  American  Labor  Legislation  Review 

dents,  but  my  pride  in  these  accomplishments  is  tempered  somewhat 
by  my  wonder  why  we  are  so  bitterly  opposed  in  our  efforts  to  secure 
pension  and  insurance  systems  for  the  aged  poor  while  Germany  has 
had  these  provisions  for  thirty-one  years  and  Great  Britain  for 
twelve  years.  *  *  * 

There  can  be  but  one  of  two  explanations  for  our  failure  to 
profit  by  the  experiment  successfully  tried  by  these  two  nations. 
One  is,  that  social  insurance  was  not  needed  here  as  there.  This  we 
must  reject.  The  difference  in  the  workmen's  pay  between  our 
country  and  these  two  countries  has  been  practically  met  by  the 
difference  in  the  standard  of  living.  The  same  fears  of  ill  health 
and  unemployment  and  want  in  old  age  that  the  governments  of 
Germany  and  England  have  been  attempting  to  relieve  are  in  the 
hearts  of  our  own  workmen.  The  other  possible  explanation  is  un- 
doubtedly the  true  one :  While  we,  for  years,  have  been  inviting  the 
immigration  of  the  foreign  individual,  we  have  erected  a  wall  as 
high  and  as  impassable  as  was  our  tariff  wall  against  the  immigration 
of  liberal  social  ideas. 

There  is  no  doubt  that  contact  with  things  they  do  not  under- 
stand is  distinctly  disagreeable  to  many  minds.  A  dog  not  only 
prefers  a  customary  smell ;  he  hates  a  good  one.  A  perfume  pricks 
his  nose  and  tends  to  undermine  all  those  moral  principles  without 
which  dog  society  cannot  exist.  No  more  remarkable  illustration  of 
this  could  be  cited  than  our  attitude  toward  Russia.  Notwithstand- 
ing the  fact  that  a  social  experiment  is  being  tried  by  that  nation  on 
the  greatest  scale  known  in  the  history  of  the  world,  we  are  not  even 
curious  to  ascertain  the  details  of  that  experiment,  or,  perhaps  I 
should  say,  any  details  except  the  horrors  which  always  accompany 
a  revolution;  but  those  portions  of  that  philosophy  of  communism 
undergoing  an  acid  test  by  170  millions  of  people,  the  experiences 
in  which  might  be  of  great  and  lasting  usefulness  to  the  human  race, 
their  importation  is  not  encouraged,  their  discussion  is  not  smiled 
upon,  and  our  nation  and  the  Allies  have  done  all  in  their  power  to 
convince  the  Russian  people  that  if  the  communistic  experiment  fails 
it  fails  not  by  virtue  of  its  inherent  weakness,  but  because  of  its 
external  enemies. 

You  will  remember  that  in  1906  there  was  an  earthquake  fol- 
lowed by  a  fire  in  San  Francisco.  The  catastrophe  had  been  im- 
pending for  a  long  time.  The  night  after  it  happened,  and  for  some 
nights  thereafter,  the  banker  and  his  coachman,  the  merchant  prince 


Face  the  Labor  Issue!  229 

and  Chinese  opium  joint  keeper,  the  lady  and  the  harlot,  the  ditch 
digger  and  his  wife,  gathered  in  one  tent  and  slept  under  one  blanket, 
and  the  world  acclaimed  it  as  an  evidence  of  the  brotherhood  of  man, 
as  an  evidence  of  the  leveling  qualities  contained  in  a  catastrophe, 
as  an  acceptance  of  the  doctrine  of  the  Nazarene.  The  earth  stopped 
shaking ;  all  neighboring  communities  sent  aid  in  supplies  and  com- 
forts of  every  nature ;  the  fire  was  put  out.  The  process  of  readjust- 
ment began,  and  soon  the  banker  and  his  coachman,  the  merchant 
prince  and  Chinese  opium  joint  keeper,  the  lady  and  the  harlot,  the 
ditch  digger  and  his  wife  resumed  their  normal  positions  in  the  social 
structure,  and  San  Francisco  the  even  tenor  of  its  way. 

In  1917  an  earthquake  occurred  in  Russia.  It,  too,  had  been 
impending  for  centuries.  Analysts  of  the  social  structure  of  that 
great  country  were  more  certain  of  the  threatening  cataclysm  than 
were  analysts  of  the  geological  structure  of  San  Francisco.  The 
quake  came  in  the  form  of  Kerensky's  revolution ;  the  fire  followed 
it  in  the  form  of  the  bolshevist  accession  to  power.  Again  the  banker 
and  his  coachman,  the  lady  and  the  harlot,  the  merchant  and  China- 
man were  jumbled  together,  but  this  was  not  acclaimed  as  an  evidence 
of  the  brotherhood  of  man ;  its  leveling  qualities  were  not  apostro- 
phized by  our  press,  and  the  flames  of  resentment  which  made  the 
fire  in  Russia  were  fed  by  France,  England,  Japan,  and  the  United 
States  by  throwing  troops  into  Russia,  by  instituting  a  blockade  of 
supplies  against  the  people  of  Russia,  and  by  encouraging  with 
advice,  arms,  and  goods  the  Kolchaks,  the  Denikins,  and  the 
Wrangels,  who  were  of  the  very  bone  and  blood  and  sinew  of  those 
responsible  for  making  the  social  structure  of  Russia  an  abhorrence 
and  a  stink  in  the  nostrils  of  free  men  for  generations  past.  And 
thus  have  we  made  it  impossible  for  the  process  of  readjustment  to 
begin,  and  the  social  jumble  there  still  continues. 

The  nations  of  Europe  treated  the  French  Revolution  in  much 
the  same  way,  and  that  experiment  is  now  approved  by  mankind  as 
the  greatest  one  single  aid  to  the  liberty  of  humanity  the  world  has 
ever  known. 

You  may  think,  and  perhaps  with  reason,  that  Russia  is  far  afield 
from  labor  legislation,  but  it  stands  out  as  the  most  striking  illustra- 
tion of  this  country's  attitude  with  respect  to  the  undesirability  of 
all  ideas  which  are  not  the  ideas  Americans  are  accustomed  to. 

In  appealing  for  labor  legislation,  this  Association  is  obliged  to 
recognize  that  our  national  and  state  legislatures  are  practically 


230  American  Labor  Legislation  Review 

without  direct  labor  representation,  and  that  this  condition,  when 
compared  with  the  English,  French,  and  German  legislative  bodies, 
is  most  marked,  and  in  my  opinion  most  menacing. 

The  labor  leaders  in  this  country  have  not  only  refrained  from 
organizing  a  labor  party,  but  until  the  last  election  have  consistently 
refrained  from  attempting  to  make  labor  politically  expressive. 

*  *     *     Labor's  inactivity  in  politics,  its  failure  to  vote  as  labor, 
has  been  reflected  in  the  political  platforms  of  both  our  great  parties. 

*  *     *     This  has  tended  to  produce  a  peculiar  situation  in  our 
political  life.    I  am  not  suggesting  that  this  failure  is  all  due  to  labor's 
aloofness  from  politics  and  the  impunity  with  which  the  two  great 
parties  have  been  able  to  ignore  labor  as  a  political  entity,  but  it 
must  have  had  a  great  deal  to  do  with  it,  and  nobody  can  deny  that 
the  existing  state  of  affairs  presents  a  very  strange  spectacle. 

Industry  in  this  country  has  developed  since  the  Civil  War  with 
great  rapidity.  Because  of  this,  a  large  percentage  of  our  popula- 
tion has  been  vitally  interested  in  the  relations  between  employer 
and  employee,  but  all  of  these  questions  have  been  either  settled  or 
left  unsettled,  and  in  so  far  as  they  were  left  unsettled  we  have  had 
direct  action,  that  is,  the  strike  and  the  lockout  instead  of  political 
action.  I  believe  everyone  will  admit  that  the  most  important  prob- 
lems in  the  lives  of  the  greatest  number  of  people  in  this  country 
are  the  problems  of  the  relation  between  capital  and  labor,  employers 
and  employees,  and  yet  there  has  never  *  *  *  been  an  issue 
made  between  the  two  great  political  parties  upon  any  of  these 
questions. 

As  has  already  been  stated,  we  do  not  find  labor  directly  repre- 
sented in  the  state  and  national  legislatures.  Neither  is  it  directly 
or  indirectly  represented  in  the  councils  of  either  the  Republican  or 
the  Democratic  parties  as  they  are  now  constituted.  These  councils 
are  dominated  by  the  employing  group  which  has  been  willing,  or 
perhaps  I  should  say  desirous,  to  have  the  difficulties  between  em- 
ployers and  labor  left  to  other  than  political  means  for  settlement. 

The  abstention  of  the  laboring  masses  from  political  action  to 
attain  their  objects  probably  arises  from  their  belief  in  the  effective- 
ness of  direct  action,  a  belief  welcomed  by  the  employer,  as  it  leaves 
him  in  control  of  the  governmental  machinery  to  withstand  direct 
action  when  labor  makes  its  challenge  along  that  line.  But  unless 
this  growing  industrial  unrest,  which  certainly  did  not  spring  out  of 
nothing  and  which  has  surely  and  steadily  been  increasing,  performs 
the  miracle  of  vanishing  into  nothing,  a  continuance  of  these  atti- 


Face  the  Labor  Issue!  231 

tudes  by  employer  and  employee  is  merely  going  to  serve  to  widen 
the  chasm  between  them. 

Now,  anybody  who  is  waiting  for  this  social  unrest  and  industrial 
ferment  to  pass  without  attaining  some  of  its  objects  is  like  the  man 
Horace  describes  who  lay  upon  the  river  bank  waiting  for  the  water 
to  pass,  in  order  that  he  might  have  a  dry  place  to  cross,  not  realizing 
the  unlimited  source  of  the  river's  headwaters. 

The  workman  must  be  roused  to  the  fact  that  direct  action  is 
never  successful  unless  the  cause  in  which  it  is  urged  has  first  been 
the  subject  of  favorable  political  reaction,  or  to  put  it  perhaps  more 
simply,  only  when  the  cause  is  the  recipient  of  favorable  public 
opinion.  For  instance,  English  workmen  were  able  to  dictate  to 
the  British  government,  by  the  threat  of  a  general  strike,  a  flat  prohi- 
bition against  supplying  the  enemies  of  the  present  Russian  govern- 
ment with  supplies  to  be  devoted  to  its  destruction.  That  was  be- 
cause the  public  opinion  of  Great  Britain  was  in  favor  of  letting 
Russia  attend  to  her  own  domestic  problems.  *  *  * 

The  workman  must  be  educated  to  the  collateral  cruelty  and 
wastefulness  of  strikes.  I  would  like  to  have  each  one  of  them  read 
a  little  one-act  French  play  where  the  curtain  rises  on  a  workman's 
family  affectionately  taking  leave  of  the  father,  who  is  departing 
to  take  up  his  night's  work  at  one  of  the  railway  stations.  His  love 
of  wife  and  children  and  his  reluctance  to  leave  are  movingly  por- 
trayed. An  hour  after  he  has  torn  himself  away  the  youngest  child 
is  writhing  in  pain.  A  physician  is  called  who  diagnoses  the  case  as 
one  for  instant  operation.  The  surgeon  comes  in  and  decides  that 
the  child  cannot  even  be  moved  to  a  hospital.  A  table  is  moved 
over  under  the  electric  lights.  The  operation  is  performed,  and 
before  the  severed  arteries  can  be  tied  and  the  open  wound  cared 
for,  the  lights  go  out — a  frantic  mother  and  a  panic-stricken  surgeon. 
Candles  are  brought  whose  inadequate  lights  do  not  permit  the  sur- 
geon to  stop  the  flow  of  blood,  and  then  while  the  child  is  bleeding 
to  death,  the  voice  of  the  father  in  the  hallway  calling  to  his  wife, 
"  Marie !  Marie !  We  have  declared  a  general  strike  and  there  is 
not  a  light  burning  in  Paris !  " 

The  employer  must  learn  that  the  workmen's  impatience  with 
the  present  social  structure  is  mostly  the  philosophy  of  distress.  If 
anybody  stands  on  your  pet  corn  long  enough,  you  don't  hesitate 
at  murder  if  you  cannot  get  him  off  in  any  other  way.  The  employer 
must  be  made  to  realize  that  he  cannot  get  his  philosophy  of  distress 
too  quickly  into  the  political  arena  and  take  it  out  of  the  realm  of 


232  American  Labor  Legislation  Review 

warfare  between  the  constabulary,  the  militia,  the  strikebreaker,  and 
the  picket.  The  employer  must  learn  that  history  is  full  of  revolu- 
tions produced  by  causes  similar  to  those  now  operating  in  these 
United  States. 

I  realize  that  while  it  is  considered  right  to  urge  the  danger 
arising  from  radicalism  as  an  argument  for  governmental  severity, 
it  is  considered  wrong  and  improper  *  *  *  to  urge  the  danger 
of  radicalism  as  an  argument  for  conciliation  or  political  education. 

I  know  of  no  way  by  which  this  education  can  be  administered 
to  employer  and  employee  unless  one  of  our  great  political  parties 
will  make  its  house  ample  and  hospitable  for  all  citizens  who  want 
the  problems  of  to-day  solved  progressively  and  peacefully,  by  knowl- 
edge and  by  reason,  and  by  political  means,  but  who  are  bound  and 
determined  that  those  problems  shall  be  solved,  that  is,  by  becoming 
a  real  liberal  party ;  and  then  this  party  so  constituted  must  go  out  to 
meet  the  present  condition  of  affairs  by  securing  an  understanding 
of  what  the  great  bodies  of  the  working  people  want  and  devise 
means  by  which  their  just  demands  shall  be  fairly  met  and  their 
excessive  demands  squarely  rejected. 

The  party  that  goes  out  to  meet  this  situation,  instead  of  empha- 
sizing the  old  formula  that  all  men  are  born  equal,  must  let  the 
laboring  man  know  that  it  recognizes  natural  inequalities  imposed 
upon  many  of  the  people  from  theis  birth  so  grave  as  to  make  it 
essential  that  if  they  are  to  be  treated  with  fairness  they  must  be 
treated  with  something  akin  to  tenderness.  The  party  that  goes  out 
to  meet  this  situation  must  stand  ready  to  bring  home  to  the  em- 
ployer the  artificial  inequalities  now  existing  which  are  so  grave  and 
serious  as  to  be  a  scandal  to  civilization.  The  party  that  goes  out 
to  meet  this  situation  must  be  prepared  to  learn  that  the  fruits  of  the 
world  are  distributed  in  such  a  way  as  to  be  a  travesty  on  human 
justice. 

The  leaders  of  the  party  that  goes  out  to  meet  this  situation 
must  remember  that  they  are  politicians  and  statesmen  and  not  anti- 
quaries, because  the  people  of  this  country  are  no  more  going  to  be 
content  with  reaction  or  with  the  return  of  the  philosophy  of  twenty- 
five  years  ago  than  they  are  going  to  return  to  drowning  witches, 
burning  heretics,  or  selling  slaves  from  the  auction  block.  If  one  of 
our  great  parties  will  make  its  house  thus  ample  and  will  honestly 
and  earnestly  seek  to  force  industrial  questions  into  the  political 
arena  for  settlement,  labor  will  cease  trying  to  indemnify  itself 
illegally  for  the  denial  of  legal  privileges. 


(  EDITOR'S  NOTE:  The  following  official  report  is  incorporated  in  this  number ) 
<  of  our  REVIEW  as  a  contribution  of  unusual  value  in  the  consideration  of  > 
|  American  proposals  for  workmen's  health  insurance.  ) 


REPORT 


of 


Investigation  into  the  Operation 


of  the 


British  Health  Insurance  Act 


By 

William  T.  Ramsey 

Chairman  of  the  Health  Insurance 
Commission  of  Pennsylvania 

in  company  with 

Ordway  Tead 

Expert  Investigator 


FOR  THE 

PENNSYLVANIA  HEALTH  INSURANCE  COMMISSION 

OF  1920 


Preface 


IN  submitting  this  report,  the  undersigned  desire  to  call  attention 
to  two  facts:  (1)  the  field  inquiry  consumed  only  one  month, 
July,  1920;  (2)  the  method  of  inquiry  was  therefore  necessarily 
confined  to  reading  all  available  documents  and  to  the  interviewing 
of  over  fifty  representative  persons  in  London,  Manchester  and 
elsewhere,  including  government  officials,  employers,  union  officials, 
friendly  society  officers,  commercial  insurance  company  officials, 
insured  workers  and  doctors. 

The  Chairman  of  your  Commission  was  accompanied  to  England 
by  Mr.  Ordway  Tead,  a  professional  consultant  in  labor  problems, 
who  was  retained  to  do  the  specialized  work  involved  in  such  an 
investigation,  and  to  formulate  the  findings.  Since  at  practically 
every  interview  both  of  us  were  present,  not  only  did  we  have 
the  advantage  which  comes  when  two  people  are  seeking  the  facts 
instead  of  one,  but  the  observations  and  conclusions  here  set  forth 
are  those  of  both  the  Chairman  and  the  investigator.  It  was  the 
easier  for  this  agreement  to  be  reached  because  the  outstanding 
facts  about  the  English  situation  soon  become  apparent  to  any 
honest  and  unbiased  observer. 

The  study  in  England  was  prefaced  by  as  full  a  reading  knowl- 
edge as  possible  of  the  details  of  the  health  insurance  legislation, 
although  this  had  resulted  in  no  settled  conviction  as  to  the  working 
of  the  act.  The  inquiry  was  conducted  with  thoroughly  open  minds, 
without  preconceptions,  with  a  sincere  desire  to  get  the  whole  truth. 

Moreover,  special  pains  were  taken  before  leaving  this  country 
tc  communicate  with  prominent  individuals  known  to  be  deeply 
interested  in  health  insurance  either  because  of  their  advocacy  or 
their  opposition.  Letters  of  introduction  were  obtained  equally 
from  both  groups  and  the  special  effort  throughout  our  visit  was 
to  search  out  and  interview  those  in  England  who  were  opposed 
to  the  act.  It  may  be  said  in  passing  that  the  active  opponents  to 
it  are  very  few,  and  many,  if  not  most,  of  the  persons  whom  it  was 
suggested  that  we  see  by  those  on  this  side  of  the  water  known  to 


be  most  critical  of  health  insurance,  turned  out  to  be  in  general 
favorable  to  health  insurance  and  only  critical  of  the  present  act  in 
some  of  its  details. 

In  short,  no  step  was  omitted  that  would  assure  our  hearing 
all  the  adverse  things  that  could  possibly  be  said  by  well-informed 
English  subjects  about  the  working  of  the  act. 

The  result  may  be  unsatisfactory  to  those  who  desire  unqualified 
statements  of  approval  or  disapproval.  For  the  conclusions  reached 
in  this  inquiry  are  not  unqualified.  They  indicate  a  degree  of  suc- 
cess and  a  degree  of  what  is  less  failure  than  confusion  of  purpose, 
which  has  necessarily  resulted  in  gradual  but  important  changes 
in  the  insurance  act  and  in  the  other  public  health  legislation  as 
well. 

This  kind  of  a  qualified  conclusion  will  be  seen  to  be  inevitable 
by  all  who  realize  that  social  institutions  develop  experimentally. 
The  value  of  this  investigation  for  America  is  thus  the  greater 
because  England's  experiments  need  not  be  repeated  in  every  par- 
ticular. They  can  and  should  be  used  as  the  basis  for  wiser  meas- 
ures designed  specifically  to  meet  American  conditions  and  needs. 

September  15,  1920. 

WILLIAM  T.  RAMSEY, 
Chairman  of  the  Commission. 

ORDWAY   TEAD, 
Expert  Investigator. 


L    Introduction 


1.  Summarized  Conclusions 

THE  investigation  into  the  operation  of  Health  Insurance  in 
Great  Britain  which  was  undertaken  at  the  request  of  your 
Commission,  was  designed  to  find  the  degree  of  success  attending 
the  operation  of  the  present  act,  to  discover  the  attitude  of  the 
various  affected  groups  toward  it,  and  to  consider  as  far  as  possible 
the  extent  to  which  it  might  be  applicable  to  American  conditions. 

It  may  be  said  at  once  that  in  the  main  and  considering  the 
handicaps  and  obstructions  suffered  during  five  years  of  war  the 
act  is  in  reasonably  successful  operation  and  is  beginning  to  produce 
some  of  the  benefits  that  were  initially  urged  in  its  behalf. 

In  the  second  place  the  affected  groups  in  the  community 
are  now  working  the  act  with  a  remarkable  degree  of  co-opera- 
tion and  with  an  all  but  universal  recognition  of  the  value  of 
the  legislation.  Few  in  the  community  would  seriously  advocate  or 
even  contemplate  its  repeal  or  withdrawal.  The  tendency  and 
common  desire  is  in  quite  the  opposite  directions  to  make  the 
act  in  fact  as  well  as  in  name  a  national  act  which  will  really 
assure  good  health  throughout  the  country. 

In  the  third  place,  as  this  report  will  presently  develop,  it  is 
highly  probable  that  much  may  be  learned  from  the  failures  and 
the  shortcomings  of  the  present  operation ;  and  any  rigid  copying 
of  the  British  act  would  certainly  be  quite  unwarranted  when  the 
peculiar  conditions  under  which  it  has  developed  are  understood. 

Points  at  which  the  British  experience  can  most  certainly  provide 
a  useful  warning  are  the  following: 

1.  The  cash  benefits  should  not  be   paid  through  approved  so- 
cieties but  through  local  bodies  publicly  constituted. 

2.  The  cash  benefit  should  be  at  least  50  per  cent  of  wages. 

3.  The  medical  benefits  should  not  be  limited  to   the  insured 
workers,  but  should  extend  to  their  families. 

4.  Hospital  care,  consultant  services  and  specialized  diagnostic 
facilities  in  the  form  of  clinics  and  laboratories  should  not  be  left  out 
of  the  plan,  but  should  be  incorporated  as  part  of  the  medical  benefit. 

This  report  will  amplify  and  explain  the  above  statements.  It 
will  be  exceedingly  difficult  to  offer  anything  like  statistical  proof 


238 

of  them  because  to  a  considerable  extent  that  does  not  exist.  At 
every  turn  and  in  respect  to  every  problem  we  were  repeatedly  told 
"  You  know,  during  the  war  it  was  impossible  to  do  that,  etc.,"  or, 
"  The  experience  of  the  war  years  would  really  vitiate  any  figures 
we  might  offer."  Hence,  while  we  have  sought  figures  wherever 
possible,  we  have  even  more  sought  the  considered  opinions  of  rep- 
resentative and  typical  spokesmen  of  the  government's  administra- 
tive staff,  employers,  trade  unions,  approved  societies,  panel  and 
general  doctors  and  insured  workers. 

2.  Purpose  of  the  Act 

It  is  first  necessary  to  consider  what  the  act  was  intended  to  do. 
It  was  advanced  by  Mr.  Lloyd  George  in  1911  to  some  extent  for 
political  reasons,  and  also  to  meet  the  conditions  revealed  in  the 
reports  of  1909  Poor  Law  Commission.  It  was  originally  intended 
to  carry  insurance  against  sickness  and  death  to  workers  and  their 
dependents  through  state  organized  funds.  But  because  of  the 
strength  of  the  commercial  life  insurance  companies  and  of  the 
"  friendly  societies  "  (working-class  mutual  benefit  societies)  the 
death  feature  was  omitted  and  these  organizations  were  allowed  to 
become  the  agents  for  administering  the  cash  benefits.  And  because 
of  the  work  and  expense  involved  the  dependents  were  excluded 
(except  in  the  case  of  the  maternity  benefit  for  the  wife  of  the 
insured  man). 

The  act  was  designed  to  be  a  preventive  of  ill  health  and  a 
means  of  alleviating  the  destitution  which  it  brought.  If  "  pre- 
vention "  is  taken  to  mean  discovering  from  the  records  of 
sickness  its  incidence  in  particular  trades  and  local  areas,  with 
special  study  and  treatment  to  reduce  that  incidence  where  it 
is  excessive,  little  has  been  done.  But  if  prevention  means  also 
making  it  easy  for  all  working  people  between  16  and  70  to 
consult  a  doctor  as  soon  as  they  begin  to  feel  ill  or  whenever 
they  are  too  ill  to  go  to  work  and  therefore  want  to  be  certificated 
for  cash  benefits  by  their  doctors  who  must  consequently  ex- 
amine them,  then  the  amount  of  preventive  work  has  been 
tremendous.  Hundreds  of  thousands  of  persons,  it  is  universally 
agreed,  seek  medical  advice  now  who  would  not  have  afforded 
it  before;  and  they  seek  it  promptly.  They  seek  it,  as  the' 
doctors  told  us,  at  a  stage  when  the  length  and  seriousness  of 
the  illness  can  usually  be  reduced.  The  fact  that  there  are 
roughly  twice  as  many  visits  paid  by  doctors  now  as  there  were 


239 

before  the  act  was  in  force  may  be  taken  to  prove  not  that  there  is 
twice  as  much  illness  or  unnecessary  visitation,  but  that  people 
see  the  doctors  as  soon  as  they  feel  indisposed,  and  that  many  people 
now  secure  medical  attention  who  never  got  it  prior  to  the  act.  As 
a  doctor  put  it  to  us,  "If  three  men  come  to  me  two  of  whom  have 
little  or  nothing  the  matter  with  them,  and  the  third  is  in  the  early 
stages  of  some  serious  disease,  all  three  visitations  are  justified." 

As  to  the  other  purpose  of  the  act,  the  relieving  by  cash  bene- 
fits of  destitution  due  to  sickness  of  the  wage-earner — the  situation 
has  been  so  profoundly  changed  by  the  war  that  accurate  statements 
are  difficult.  The  cash  benefit,  even  as  increased  by  recent  legisla- 
tion, is  so  small  as  compared  with  wages  that  in  cases  of  prolonged 
sickness  the  need  of  some  larger  degree  of  outside  assistance  is  still 
necessary.  The  act  does  not  provide  a  large  enough  cash  benefit  to 
remove  the  possibility  of  destitution  resulting  from  the  wage- 
earner's  sickness.  Due  to  a  combination  of  causes,  however,  the 
amount  of  actual  destitution  is  less  in  England  (July,  1920)  than 
before  in  recent  years.  It  is,  for  example,  generally  admitted  that 
wages  have  in  most  cases  risen  to  a  degree  that  has  made  provision 
out  of  wages  for  more  food  and  for  illness  more  likely  than  in  pre- 
war days.  Especially  have  the  unskilled  workers  improved  their 
status  in  this  respect. 


II.   Brief  Description  of  the  Act 

THE  original  act  of  1911  was  amended  at  various  points  in 
1913,  1918  and  1920.  Since  the  report  of  the  previous  Health 
Insurance  Commission  of  Pennsylvania1  contains  an  admirable  out- 
line and  summary  of  the  provisions  of  the  basic  legislation,  it  is  only 
necessary  to  mention  below  the  essential  features  of  the  present  law 
and  regulations.  Many  minor  provisions  have  intentionally  been 
omitted  in  the  interest  of  clarifying  the  main  points. 

1.  Contributions 

Men  pay  10  pence  (20  cents)  a  week,  of  which  the  employer 
pays  5  pence  and  the  worker  5  pence.  To  the  amounts  thus  col- 
lected the  state  adds  an  amount  equal  to  2/9  (two-ninths)  of  the 
total. 

1  Report  of  the  Health  Insurance  Commission  of  Pennsylvania,  January, 
1919. 


240 

Women  pay  9  pence  (18  cents)  a  week  of  which  employer  pays 
5  pence  and  the  worker  4  pence.  To  the  amount  thus  collected  the 
state  adds  an  amount  equal  to  %  (one-fourth)  of  it. 

These  contributions  are  payable  in  respect  to  practically  all 
manual  workers,  and  all  non-manual  workers  whose  income  falls 
below  £250  per  year  ($1,250). 

Other  citizens  may  join  as  u  voluntary  contributors,"  but  since 
no  medical  benefits  are  available  for  them  they  pay  a  reduced  con- 
tribution. 

The  contributions  are  made  through  the  employer  who  buys 
special  stamps  at  the  post  office.  These  he  is  required  to  affix 
weekly  to  the  card  of  each  employee  as  in  evidence  of  payment. 

If  the  employer  has  more  than  100  employees  he  may  stamp  the 
worker's  card  half  yearly  with  one  lump  sum,  high-value  stamp 
representing  the  total  amount  of  the  combined  contributions.  These 
cards  are  at  each  six  months'  interval  given  to  the  individual  work- 
ers who  send  them  to  their  respective  "  approved  societies  "  (pres- 
ently defined)  which  in  turn  use  them  as  evidence  of  payment  to 
get  the  proper  funds  credited  to  them  by  the  Government.  The 
approved  societies  then  distribute  fresh  cards  to  the  employers  with 
whom  their  members  are  at  work. 

2.  Cash  Benefits 

The  man  who  is  certificated  by  the  doctor  as  "  incapable  of 
work"  because  of  some  specific  illness  is  entitled  to  15  shillings 
($3.75)  a  week  after  a  three-day  waiting  period,  which  payment 
may  continue  for  twenty-six  weeks.  And  for  continued  disability 
thereafter  he  gets  7  shillings  6  pence  ($1.88)  a  week  so  long  as  he 
is  incapable  of  work. 

The  benefit  for  a  woman  worker  is  12  shillings  ($3.00)  with 
the  same  disability  benefit  as  the  man's. 

To  be  eligible  for  these  benefits  the  worker  must  have  paid  con- 
tributions for  26  weeks ;  and  he  is  deemed  to  be  in  arrears  in  his 
contributions  if  they  are  not  made  for  at  least  48  weeks  in  the 
insurance  year.  When  in  arrears  the  worker  is  notified  and  has 
three  months'  grace  in  which  to  become  fully  eligible  by  the  payment 
of  a  fixed  sum  depending) upon  the  length  of  the  arrears  period;  and 
if  that  is  not  paid  he  is  eligible  for  benefits  at  a  lowered  rate. 

A  married  woman  worker  is  entitled  to  40  shillings  ($10)  at 
confinement.  The  wife  of  an  insured  man  is  entitled  in  her  own 
right  to  the  same  amount  when  confined ;  and  if  both  husband  and 
wife  are  working,  two  maternity  benefits  are  paid. 


241 

The  cash  benefits  are  usually  paid  through  the  local  officer  of 
an  approved  society  upon  presentation  to  the  society  of  the  medical 
certificate  from  the  worker's  doctor  and  also  in  many  cases  after  a 
visit  from  the  society's  sick  visitor. 

3.  Medical  Benefits 

Every  insured  person  is  entitled  to  medical  attendance  through- 
out his  illness  provided  it  is  service  that  can  be  rendered  by  a  general 
practitioner  of  ordinary  skill  and  capacity.  This  service  does  not, 
however,  include  the  services  of  a  doctor  at  times  of  confinement  of 
an  insured  woman  or  of  the  wife  of  an  insured. 

The  sanitarium  benefit  heretofore  providing  hospital  care  for 
tuberculous  insured  persons,  is  to  be  withdrawn  after  1920  for 
reasons  which  will  be  presently  considered. 

Medical  benefit  also  includes  the  free  provision  of  the  familiar 
drugs  and  medicines  and  of  a  stated  number  of  medical  and  surgical 
appliances  such  as  bandages,  etc. 

There  is  no  statutory  provision  for  hospital  treatment, 
nurses,  dental  treatment,  medical  attendance  upon  the  dependents 
of  the  insured,  specialists'  advice  or  medical  care  at  confinement. 

4.  Administration  of  Cash  Benefits 

There  are  the  following  general  types  of  carrying  funds  which 
the  insured  person  may  join : 

An  approved  commercial  insurance  company. 

An  approved  friendly  society. 

An  approved  trade  union. 

An  approved  establishment  fund. 

In  addition,  there  is  a  class  called  deposit  contributors,  who 
belong  to  no  society,  but  hold  their  own  cards  and  buy  stamps  for 
themselves  at  the  post  office.  Their  contributions  are  only  avail- 
able in  benefits  to  the  amount  of  their  own  and  their  employers' 
payments ;  there  is  no  sharing  of  the  risk  with  the  members  of  any 
group. 

The  worker  has  the  option  of  choosing  his  approved  society ;  and 
he  may  not  transfer  except  at  stated  intervals  and  on  payment  of 
two  shillings. 

The  approved  societies  are  not  profit-making  bodies  and  they 
do  not  pool  their  funds.  Each  fund  is  supposed  to  carry  its  own 
burden  of  sickness  and  the  idea  has  been  that  if  any  society  accu- 
mulated a  surplus,  that  value  would  be  available  for  larger  benefits 


242 

to  the  members  of  that  society.  A  valuation  was  to  be  made  every 
live  years  to  determine  the  condition  of  the  funds ;  but  owing  tc 
the  war  the  first  valuation  is  only  now  being  brought  to  completion. 
The  results  of  it  will  not  be  published  until  early  in  1921 ;  but  they 
will  probably  show  a  considerable  variation  in  surpluses.2 


5.  Administration  of  Medical  Benefits 

The  local  doctors  who  desire  to  practice  under  the  act — that 
is,  do  the  medical  work  for  the  insured — are  contracted  with  by 
a  local  insurance  committee,  which  is  the  representative  administra- 
tive and  supervisory  body  of  each  local  area  in  respect  to  the 
medical  side  of  the  act.  Doctors  are  now  paid  at  the  rate  of  11 
shillings  per  year  per  person  on  their  "  panel."  However,  in  Man- 
chester and  Salford,  although  the  total  sum  of  money  available  to 
be  used  in  payment  of  the  local  doctors  is  allotted  at  this  rate,  the 
individual  doctor  is  paid  on  a  visitation  basis  on  a  scale  locally 
agreed  upon. 

Complaints  of  inadequate  or  unsatisfactory  medical  service  are 
supposed  to  be  brought  to  this  insurance  committee;  and  if  there 
is  a  real  case  against  a  doctor  there  is  an  investigation  and  final 
decision  by  a  body  of  inquiry  composed  of  three  doctors  and  a 
barrister. 

Up  until  now  if  there  has  been  doubt  about  the  certification  by 
a  doctor  of  an  insured  person,  the  approved  society  has  usually 
employed  its  own  medical  referee  to  give  an  opinion.  Under  the 
latest  amendment  thirty  state  referees  have  now  been  appointed 
to  look  into  doubtful  cases. 

In  order  to  assure  a  reasonable  division  of  work  and  proper 
service  to  each  individual,  the  size  of  the  panels  is  now  to  be 
limited  to  a  maximum  of  3,000  persons,  with  authority  in  the  local 
insurance  committee  to  restrict  the  number  further  where  they  so 
desire.  In  the  London  area,  for  example,  the  panel  of  any  indi- 
vidual doctor  may  now  be  only  2,000.  In  Manchester,  on  the  other 
hand,  it  may  be  3,000.  As  a  matter  of  fact  the  great  majority  of 
panels  are  less  than  2,000  in  number. 


2  Interim  Report  by  the  Government  Actuary  upon  the  Valuation  of  the 
Assets  and  Liabilities  of  Approved  Societies  as  of  December,  1918. 


243 

6.  Financial  Arrangements 

The  explicitly  recognized  expenses  under  the  act  are  the  follow- 
ing: 

1.  The  cash  benefits. 

2.  Payment  to  doctors  at  the  rate  of  11  shillings  per  person  per  year. 

3.  Administration  expenses  of  approved  societies  at  rate  of  4  shillings 
5  pence  per  person  per  year. 

4.  Administrative  expenses  of  insurance  committees. 

5.  Payment  for  drugs  on  basis  of  an  agreed  schedule  of  prices. 

6.  Administrative  expenses  of  Ministry  of  Health  including  indoor  and 
outdoor  staff. 

7.  Reserve  Fund. 

8.  The  contingencies  fund. 

9.  Women's  Equalization  Fund. 

10.  Central  Fund. 

(The  last  four  funds  are  explained  later.) 

To  meet  these  expenses  there  are  available  the  three-fold  con- 
tributions, and  sundry  parliamentary  grants  which  have  been  called 
for  as  special  problems  have  arisen. 

7.  National  Administration 

The  central  administration  which  includes  allocation  and 
handling  of  accounts,  inspection  of  operation  of  the  act  by  em- 
ployers, insurance  committees  and  approved  societies,  issuance  of 
regulations,  stamps,  cards,  etc.,  is  vested  in  a  department  of  the 
Ministry  of  Health. 

The  actual  arrangements  with  local  doctors  and  the  actual  pay- 
ment of  cash  benefits  is,  however,  left  to  the  several  local  agencies 
above  described. 


III.   Other  Public  Health  Legislation 

NO   adequate  picture   of  the   working  of   the  act  is  possible 
without  mention  of  the  public  health  measures  which  are 
simultaneously  provided. 

In  1919  the  Ministry  of  Health  was  organized  "  for  the  pur- 
pose of  promoting  the  health  of  the  people  "  of  Great  Britain. 
Under  it  are  now  grouped  for  purposes  of  co-ordination  the 
following  administrative  duties: 

1-    Those  of  Local  Government  Boards  pertaining  to  Public  Health. 
2.    The  administration  of  the  National  Health  Insurance. 


244 

3.  Supervision  of  work  of  Board  of  Education  for  expectant  and  nursing 
mothers  and  of  children  up  to  five. 

4.  Supervision  of  work  of  same  body  in  respect  to  medical  inspection  and 
treatment  of  school  children. 

5.  Supervision  of  midwives. 

Under  other  recent  enactments,  provision  is  already  made  by 
most  local  authorities  with  the  aid  of  special  grants  from  Parlia- 
ment for  treatment  of  tuberculosis,  venereal  diseases,  medical  and 
dental  work  for  school  children,  maternity  and  infant  welfare 
centers. 

The  situation  is  well  summarized  in  the  following  paragraph: 

"  (1)  Before  birth  the  expectant  mother  may  be  dealt  with  by  the  local 
Health  Authority  (i.e.,  the  Town  or  County  Council,  or  District  Committee), 
under  the  Notification  of  Births  (Extension)  Act  (Child  Welfare). 

"  (2)  At  birth  there  may  be  in  attendance  either  a  midwife  provided  by 
the  Local  Authority  or  a  panel,  or  private  medical  practitioner. 

"  (3)  From  birth  till  five  years  of  age  is  reached,  the  child  again  comes 
under  the  Child  Welfare  Scheme  of  the  Local  Authority. 

"(4)  Between  five  and  fourteen  years,  the  child  comes  under  the  medical 
inspection  scheme  of  the  Education  Authority,  but  if  treatment  is  required 
that  may  be  obtained  from  the  family  doctor  or  through  a  voluntary  or 
charitable  agency,  or  through  clinics  provided  by  the  Education  Authority. 

"(5)  From  fourteen  to  sixteen  years  there  is  no  public  provision  of  any 
kind  for  medical  treatment,  but  the  young  person,  if  seeking  employment  in 
a  factory,  will  be  examined  by  a  certifying  Surgeon  appointed  by  the  Home 
Office. 

"  (6)  From  sixteen  years  of  age  till  the  end  of  life,  the  man  or  woman, 
if  employed,  comes  under  the  Insurance  Acts,  and  receives  Medical  Benefit 
through  the  Insurance  Committee."  3 

The  doctors  engaged  on  full  or  part  time  under  one  or  another 
of  these  provisions  probably  total  several  thousand,  and  are  thus 
in  fact  the  members  of  an  embryonic  national  medical  service. 

In  addition  to  the  above  provisions  it  should  be  explained  that 
the  Local  Poor  Law  Guardians  also  have  their  own  medical  and 
hospital  provisions  for  destitute  persons  of  any  age.  But  it  is  now 
proposed  and  contemplated  that  all  of  this  work  shall  be  taken  over 
and  done  under  the  local  authorities,  which  will  mean  the  final 
abolition  of  the  Poor  Law  administration  in  so  far  as  it  constitutes 
a  distinct  branch  of  the  medical  service. 

It  is  significant  to  point  out  in  connection  with  all  of  this 
legislation  that  the  tendency  is  definitely  toward  separating 
from  the  insurance  act  all  special  medical  treatment  and  toward 

3  A  Public  Medical  Service,  by  McKail  &  Jones,  1919. 


245 

providing  on  a  universal  public  health  basis  those  medical 
services  which  are  not  readily  available  through  a  general 
practitioner.  This  is  the  meaning  of  the  removal  of  tuberculosis 
and  venereal  disease  treatment  from  under  the  act;  and  of  the 
institution  of  maternity  centers  and  care  for  all  mothers  under 
an  act  of  1918.  And  it  is  not  unlikely  that  in  the  next  few  months 
the  Government  will  bring  in  a  bill  on  the  hospital  question  which 
will  at  least  provide  state  payment  for  insured  persons  in  hospitals 
and  possibly  for  all  regardless  of  whether  they  are  or  are  not  in- 
sured. 

In  short,  the  insurance  act  has  been  one  of  the  potent  in- 
fluences in  rallying  public  attention  and  support  to  a  consistent 
and  complete  program  of  public  health  administration.  And  the 
Ministry  of  Health  will  undoubtedly  in  the  next  few  years  extend 
the  scope  and  improve  the  quality  of  the  medical  services  available 
for  all  the  people.  To  this  extent  the  insurance  act  has  unques- 
tionably been  an  aid  in  the  direction  of  fundamental  preventive 
medicine. 

Having  given  this  brief  sketch  of  the  framework  of  health  in- 
surance legislation  and  administration,  it  is  necessary  next  to  con- 
sider its  actual  operation. 


IV.    The  Act  in  Operation 


1.  Contributions 

AT  present  there  is  little  if  any  objection  to  be  found  to  the 
compulsory  collection  of  contributions,  except  from  those 
who  believe  that  the  contributory  principle  is  less  sound  or  less 
economical  than  the  non-contributory — believe,  namely,  that  cash 
subventions  as  well  as  medical  service  should  be  provided  directly 
out  of  taxes. 

It  appears  to  be  widely  understood  that  in  whatever  way  im- 
mediate expenses  are  met,  it  is  ultimately  industry  itself  from  which 
the  cost  is  met.  Whether  the  contributions  are  direct  by  assessment 
or  indirect  from  taxation,  the  income  out  of  which  payment  comes 
results  from  the  productivity  of  industry  and  agriculture.  And  it 
is  not  generally  felt  to  be  a  matter  of  primary  moment  to  argue 


246 

whether  the  contributions  at  least  for  the  medical  service  should 
be  secured  in  one  way  or  another.4 

On  the  other  hand,  it  is  true  that  the  present  contributory 
method  of  collecting  the  funds  out  of  which  the  cash  benefits 
and  the  medical  benefits  are  paid,  lightens  the  burden  of  direct 
taxation  and  is  not  felt  to  be  an  onerous  burden  by  any  indi- 
vidual employer  or  worker.  From  the  point  of  view  of  adjusting 
the  Government's  public  health  budget  to  its  available  income 
resources,  this  consideration  becomes,  of  course,  of  almost  de- 
termining importance.  It  should  be  clear,  however,  that  if  we 
in  the  United  States  elect  to  proceed  by  the  contributory  plan  or 
by  public  grants,  there  is  some  substantial  expense  involved. 
Good  health  can  be  bought  only  and  as  soon  as  we  are  willing 
to  pay  the  price. 

As  to  the  administration  for  collecting  the  benefits,  the  work 
and  confusion  are  now  reduced  to  a  minimum.  Yet  it  is  useful  to 
consider  further  (1)  the  method  of  collection  and  (2)  the  cost  of 
collection. 

If  the  contributory  idea  is  to  prevail,  there  must  of  course  be 
some  definite  evidence  of  payment  which  is  readily  available  for 
the  employer,  the  insured,  the  approved  society  and  the  govern- 
ment. The  stamped  card  was  only  adopted  after  the  most  pro- 
longed consideration ;  it  is  admitted  to  be  a  clumsy  method,  but 
no  satisfactory  substitute  has  yet  been  found  which  will  apply  to 
all  cases.  It  is  still  conceivable,  nevertheless,  that  a  simpler  method 
might  be  used  for  all  but  the  most  irregular  and  shifting  types  of 
work  where,  because  the  worker  is  constantly  moving  about,  it  is 
hard  for  him  to  have  at  all  times  evidence  of  his  standing  as  to 
payment. 

The  method  of  lump-sum  stamping  at  the  end  of  each  six 
months  obviates  much  clerical  work.  The  machinery  of  collection 
may  thus  be  said  to  be  running  as  smoothly  as  could  be  expected 
in  a  huge  system  comprehending  15,000,000  people  and  ranging 
from  scrubwomen  who  come  in  by  the  day  to  highly  skilled  artisans 
and  clerks  whose  income  is  regular. 


*A  valid  criticism  may  be  made,  however,  against  the  restriction  of  the 
benefits  to  a  limited  number.  Sir  Arthur  Newsholme,  Medical  Officer  of  the 
Local  Government  Board,  says,  for  example,  in  a  recent  volume  (Public 
Health  and  Insurance,  Johns  Hopkins  Press,  1920)  :  "  On  the  point  of  equity 
it  must  be  admitted  that  any  system  of  so-called  insurance  which,  like  that  of 
the  English  act,  excludes  a  large  proportion  of  the  population  who,  while 
paying  in  taxes  in  aid  of  the  insured,  require  but  do  not  receive  their  benefits, 
is  contrary  to  the  principle  that  any  expenditure  of  Government  funds  should 
ensure  to  the  whole  commmunity  in  need  of  the  provision  in  question." 


247 

Nevertheless,  thoughtful  administrators  of  the  act,  including 
such  persons  as  approved  society  secretaries,  government  inspectors, 
the  best  doctors,  etc.,  call  the  whole  stamp  machinery  into  question 
— at  least  so  far  as  the  contributions  are  made  to  affect  eligibility 
for  medical  attention.  They  point  to  the  difficulties  created  by 
loss  of  cards  by  workers,  agents  or  approved  societies,  by  failure 
to  stamp  cards,  failure  to  pay  arrears.  They  point  to  the  large 
amount  of  time  and  money  required  to  hunt  down  (1)  the  loss  or 
error  in  one  card,  (2)  to  be  sure  that  employers  are  regularly 
stamping  the  cards,  (3)  to  be  sure  that  workers  are  technically 
eligible  for  benefits  to  which  they  are  entitled  or  which  they  mani- 
festly should  have.  In  the  Government's  own  inspecting  staff  an 
enormous  amount  of  time  is  certainly  spent  straightening  out  irregu- 
larities in  regard  to  contributions. 

The  cost  of  contributions  and  collection  is  negligible  as  far 
as  the  individual  employer  is  concerned.  The  administrative 
expense  of  bookkeeping  entries  and  stamping  is  surprisingly  small ; 
and  the  employer's  share  of  the  contributions  is  usually  not  over 
one  per  cent  of  the  payroll.  For  example,  in  one  store  with  over 
7,000  employees  not  more  than  the  equivalent  of  the  full  time  of  two 
clerks  is  devoted  to  the  health  insurance  details.  In  one  factory 
with  about  800  workers  about  half  the  time  of  one  clerk  was  used. 
In  general  this  cost  would  come  to  not  over  one-tenth  of  one  per 
cent  of  the  payroll.  The  testimony  of  employers  was  therefore 
unanimous  that  the  expense  of  the  act  to  them  was  not  a  factor 
of  any  importance. 

From  the  public  point  of  view,  however,  the  total  expense  of 
securing  the  contributions  is  undoubtedly  great  when  all  items  in 
the  account  are  considered — inspection,  printing,  postage,  handling 
of  stamps  and  cards  by  employers,  approved  societies  and  govern- 
ment officers.  And  that  irregularities  regarding  contributions  and 
stamping  should  ever  deprive  the  insured  of  medical  treatment  is 
surely  a  denial  of  the  whole  idea  of  assuring  good  health  among 
the  workers.  It  frequently  happens,  moreover,  that  the  worker 
whose  contributions  are  not  in  good  order,  will  be  the  very  one 
who  needs  most  not  only  the  medical  but  the  cash  benefit  as  well. 

In  short,  the  conditions  determining  the  eligibility  for  cash 
benefits  may  also  disqualify  the  worker  from  benefits  on  the 
medical  side.  This  inter-relation  seems  to  have  little  to  com- 
mend it  from  the  public  health  point  of  view.  There  should,  it 
would  seem,  be  no  question  from  the  public  health  point  of  view 


248 

of  eligibility  for  medical  benefit.     Any  person  needing  medical 
attention  should  be  able  to  have  it. 

2.  Cash   Benefits 

The  cash  benefits,  even  as  now  increased,  is  in  most  cases  such 
a  small  fraction  of  the  possible  wages  that  it  is  decidedly  inadequate 
to  protect  the  income  and  living  standard  of  the  insured  during 
illness.  It  is  generally  conceded  that  the  benefit  should  be  less  than 
wages,  but  a  cash  benefit  which  i?  50^o  of  wages  is  the  very  least 
that  should  be  considered  if  a  real  subsidy  is  intended.  Yet  with 
a  wage  level  for  men  workers  today  of  between  three  and  a  half 
and  five  pounds  a  week  (from  $17.50  to  $25.00),  the  weekly  cash 
benefit  of  $3.75  is  less  than  25  per  cent  of  wages. 

The  small  size  of  the  present  cash  benefit  not  only  auto- 
matically brings  malingering  to  a  minimum,  but,  as  several 
doctors  said,  the  sick  worker  often  returns  to  work  before  he 
sho'uld.  Even  unskilled  workers  are  in  many  cases  able  to  earn 
as  much  in  one  or  two  days'  work  per  week  as  they  could  get  from 
the  whole  week's  benefit.  The  problem  from  the  point  of  view  of 
malingering  only  becomes  difficult  in  cases  of  irregular  work, 
where  the  worker  may  not  have  regular  weekly  employment  and 
thus  may  normally  get  wages  which  do  not  exceed  the  usual  benefit. 

The  promptness  with  which  cash  benefits  are  paid  appears  to 
vary  greatly  with  the  efficiency  of  the  approved  society.  The  best 
organized  societies  unquestionably  pay  claims  promptly  upon  their 
receipt.  Delay  may  be  due  to  many  causes,  principal  among  which 
are  the  question  in  the  mind  of  the  society  as  to  the  validity  of  the 
medical  certification,  and  (in  the  case  of  commercial  companies) 
transfer  of  agents  with  whom  the  insured  thus  gets  out  of  touch 
and  therefore  does  not  know  where  to  submit  his  claim. 

The  cash  maternity  benefit  is  undoubtedly  the  most  popular 
and  the  most  valued.  The  money  is  now  paid  directly  to  the 
woman  beneficiary  and  the  testimony  is  general  that  in  ninety-five 
cases  out  of  a  hundred,  the  money  is  used  to  help  in  defraying  the 
expenses  of  confinement.  It  assures  that  the  mother  takes  care 
to  have  a  qualified  midwife  in  attendance  at  the  confinement.  And 
the  latter  is  sure  to  be  on  hand  since  she  knows  that  the  money  for 
her  fees  is  available.  Moreover,  the  midwife  is^now  required  in 
case  of  any  complication  to  call  in  a  doctor  whose  attendance  fees 
are  paid  by  the  local  authorities  under  the  maternity  provisions  legis- 
lation of  1918.  Indeed,  now  that  there  is  in  most  local  areas  some 


249 

follow-up  work  with  expectant  mothers  (as  a  Public  Health  Pro- 
vision), the  likelihood  is  even  greater  that  the  maternity  benefit  will 
be  wisely  expended. 

The  maternity  benefit  is  not,  however,  adequate  to  cover  all 
the  charges  incident  to  confinement.  The  nurse's  or  doctor's  fees 
usually  take  all  or  nearly  all  of  the  benefit,  which  leaves  the  other 
expense  to  be  otherwise  met.  There  is  therefore  a  demand,  espec- 
ially in  labor  circles,  for  the  payment  of  a  larger  amount  which 
will  be  more  in  the  nature  of  a  maternity  endowment  paid  to  all 
mothers. 

There  is  also  on  the  part  of  organized  labor  a  definite  sentiment 
favoring  the  addition  of  a  funeral  benefit  for  the  deceased  worker. 
The  demand  for  this  will  undoubtedly  be  strengthened  by  the  recent 
governmental  inquiry  into  the  operation  of  commercial  insurance 
companies,  which  found  that  in  one  large  company  over  40  per 
cent  of  the  insurance  policies  lapsed  with  consequent  advantage  to 
the  companies  and  no  return  whatsoever  to  the  insured ;  and  found 
also  that  "  though  practically  every  person  in  the  wage-earning  class 
is  insured  at  some  point  of  his  life,  at}  least  30  per  cent  of  the  deaths 
among  that  class  are  uninsured  at  death."5 

Indeed  the  departmental  committee  of  inquiry  intimated  that  "  it 
might  be  practicable  to  propose  a  funeral  benefit  to  be  administered 
under  the  National  Health  Insurance  System." 

3.  Medical  Benefits 

As  already  suggested,  the  existence  of  free  medical  service  for 
all  insured  persons  means  that  many  now  go  to  doctors  who  did  not 
do  so  before  and  go  at  the  earliest  signs  of  illness.  Everyone  agrees 
that  this  is  an  incalculable  benefit,  the  good  results  of  which  in  a 
better  level  of  health  cannot  fail  to  materialize. 

It  should  be  pointed  out,  however,  that  the  medical  service 
which  is  available  is  neither  thorough  nor  exhaustive;  nor  is  it 
expected  to  be  under  the  terms  of  the  act.  If  a  doctor  finds 
that  a  case  requires  an  operation,  or  he  is  uncertain  of  the  proper 
diagnosis,  he  must  now  have  recourse  to  hospital  and  consult- 
ants whose  services  are  not  required  to  be  available  to  him  or 
to  the  insured  under  the  act.  It  has  happened  fortunately  up 
until  now  that  the  voluntary  hospitals  (supported  by  private 
subscription  and  by  the  free  work  of  their  medical  staffs)  have 
stood  ready  to  supplement  the  work  of  the  general  practitioner 

6  Industrial  Insurance  Companies  and  Collecting  Societies,  Cd.  614,  1920. 


250 

to  the  extent  of  their  facilities.  In  this  way,  hospital  service  has 
been  usually  available,  although  it  has  never  been  guaranteed, 
never  been  completely  adequate  in  the  urban  districts,  always 
been  dependent  on  private  charity  and  subject  in  no  way  to  any 
control  by  the  patients  or  by  the  public  health  authorities.  It  is 
one  of  the  anomalies  of  the  act  that  its  success  on  the  medical 
side  depends  upon  access  to  hospital  and  consulting  facilities 
which  have  as  yet  no  organic  relation  to  the  rest  of  the  scheme. 

Now  that  the  hospitals  are  on  the  verge  of  insolvency,  the  Gov- 
ernment is  being  obliged  to  consider  relating  them  to  the  insurance 
provisions  more  formally. 

Much  attention  was  given  in  our  investigation  to  the  quality 
of  medical  service  given.  While  accurate  general  statements 
are  difficult  to  make,  it  is  probably  fair  to  say  that  the  workers 
of  England  are  on  the  whole  now  getting  more  and  better  medical 
service  than  they  ever  did  before  the  act.  It  has  to  be  remem- 
bered, however,  (1)  that  under  the  act  every  registered  general 
practitioner  has  always  been  eligible  to  become  an  insurance 
doctor,  simply  by  making  application;  (2)  during  the  war  a 
great  many  of  the  best  practitioners  were  in  army  or  navy  service ; 
(3)  the  act  only  requires  such  treatment  as  "  can  consistently  with 
the  best  interests  of  the  patient,  be  properly  undertaken  by  a  prac- 
titioner of  ordinary  professional  competence  and  skill."  (Medical 
Regulations.) 

These  three  facts  alone  go  far  to  account  for  much  of  the 
criticism  which  has  been  leveled  at  the  quality  of  medical  work 
given  under  the  act.  Moreover,  the  doctors  were  at  first  hostile  to 
or  suspicious  of  the  act.  Today  this  is  not  true.  Out  of  between 
20,000  and  23,000  doctors  (how  many  of  these  are  only  consultants 
and  not  supposed  to  do  insurance  work  is  difficult  to  find  out)  who 
are  in  active  practice,  over  14,000  are  on  the  panels. 

Criticism  of  the  medical  service  has  fastened  on  the  danger  of 
"  lightning  diagnosis ;"  on  the  distinction  made  in  attention  given  to 
panel  as  against  non-panel  patients;  on  the  difficulty  of  lodging 
complaint  against  a  doctor ;  and  on  the  fact  that  the  best  doctors  do 
not  become  insurance  practitioners.  There  is  undoubtedly  con- 
siderable basis  for  some  of  these  criticisms  or  they  would  not  be 
repeated  so  often.  But  the  testimony  is  on  the  other  hand  con- 
vincing that  medical  service  is  better  now,  barring  the  handicaps  of 
war  just  noted,  than  it  ever  could  have  been  before  for  thousands 
of  persons.  Now  that  the  number  of  patients  per  insurance  doctor 
is  to  be  limited  and  the  doctors  are  finding  their  panel  practice  in 


251 

most  cases  so  remunerative,  the  reasons  for  inferior  service  will 
be  reduced.  The  doctors  are  and  will  be  increasingly  anxious  to 
keep  the  good  will  of  the  insured  and  of  the  insurance  committee 
as  well. 

The  Scotch  Health  Insurance  Commission  which  until  July, 
1919,  administered  the  act  for  Scotland  says  in  its  latest  report 
that  "  very  little  reliable  evidence  has  emerged  of  neglect  of  duty 
on  the  part  of  insurance  practitioners  or  of  any  real  ground  for 
loose  general  charges  of  inefficiency.  Dissatisfaction  with  a 
limited  service  and  agitation  for  an  extended  and  complete 
medical  arid  institutional  service  must  not  be  founded  on  as  a 
condemnation  of  the  present  insurance  scheme  but  rather  as  an 
indication  that  it  has  resulted  in  increased  appreciation  of  the- 
importance  of  a  great  development  of  medical  services  in  the 
interests  of  the  national  welfare."  (Boldface  ours.) 

Invidious  distinction  between  panel  and  non-panel  patients 
is  undoubtedly  still  made;  but  it  is  generally  considered  to  be 
decreasing.  The  feeling  of  inadequacy  in  the  attention  received 
appears  to  be  a  social  as  much  as  a  medical  matter.  In  those 
cases  where  the  insured  person  does  not  use  his  panel  doctor,  but 
goes  to  another  physician  and  pays  a  private  fee,  the  person  is 
usually  in  the  ranks  of  the  clerical  workers  who  still  feel  a  certain 
class  superiority  to  manual  workers  and  therefore  to  panel  doctors 
who  treat  manual  workers. 

The  real  reason  for  inadequacy  of  treatment  is  affirmed  by 
the  best  doctors  in  England  to  be  due  rather  to  inadequate  medical 
education  and  insufficient  opportunity  for  special  diagnostic  assist- 
ance from  which  insured  and  non-insured  suffer  alike.  Opportun- 
ities for  study  after  the  doctor  leaves  medical  school  are  meager; 
his  opportunities  for  consultation  with  other  practitioners  and 
specialists  are  not  well  organized;  access  to  laboratories  is  not  as- 
sured. 

An  offset  to  this  as  well  as  to  other  shortcomings  of  general 
practitioners'  service,  is  increasingly  being  resorted  to  in  the  form 
of  partnerships  of  insurance  doctors.  These  partnerships  are  of 
from  two  to  six  men,  each  of  whom  has  his  assigned  hours  at  the 
offices  and  also  naturally  has  some  diseases  on  which  he  is  more 
of  a  specialist  than  his  colleagues.  Under  this  arrangement  the 
insured  are  certain  of  a  doctor  being  at  hand  all  the  time,  yet  each 
individual  doctor  has  free  time  for  study  and  recreation.  The  terms 
under  which  these  partnerships  work  are  governed  by  regulations 
of  the  Ministry  of  Health,  so  that  the  danger  of  any  abuse  of  the 


252 

plan  is  slight.  Indeed,  such  arrangements  appear  to  be  officially 
encouraged.  Similar  results  are  to  a  certain  extent  obtainable  where 
an  insurance  doctor  hires  an  assistant  to  help  him. 

The  medical  services  under  the  act  are,  it  should  be  emphasized, 
specifically  planned  on  the  theory  that  only  general  practitioners' 
services  can  at  this  stage  be  given.  Tuberculosis  care,  for  example, 
except  for  domiciliary  treatment,  is  now  removed  from  the  act  and 
entrusted  to  the  local  authorities.  The  insurance  doctor  is  not  sup- 
posed to  have  to  treat  venereal  cases,  which  also  go  to  a  local  clinic. 
Nor  is  the  insurance  doctor  expected  to  take  maternity  cases  unless 
he  so  elects.  But  he  is  supposed  to  be  able  to  diagnose  and  treat 
the  usual  complaints  and  to  act  as  a  clearing  house  for  sending 
Special  cases\  to  the  necessary  agency.  It  is  in  his  home  contacts  and 
constant  knowledge  of  the  family  that  his  value  lies.  The  policy 
thus  exemplified  seems  to  argue  for  more  adequate  statutory  pro- 
visions to  correlate  general  and  specialist  advice. 

The  question  of  determining  eligibility  for  medical  benefit 
reveals  the  anomaly  of  trying  to  adhere  strictly  to  the  insurance 
principle  in  the  provision  of  medical  treatment  while  at  the 
same  time  trying  to  make  the  physicians'  services  as  fully  available 
to  all  as  possible.  Loss  of  one's  medical  card,  failure  to  pay  a 
sufficient  number  of  weeks'  contribution  or  failure  to  "  sign  on  " 
to  a  doctor's  list,  may  temporarily  make  it  difficult  if  not  im- 
possible for  one  to  be  eligible  for  medical  attention.  Testimony 
is  general,  however,  that  a  person  needing  treatment  is  likely 
to  get  it  regardless  of  his  legal  status  under  the  act.  And  this 
seems  natural.  The  only  real  evidence  which  it  should  be  neces- 
sary to  give  as  to  eligibility  for  treatment  is  increasingly  seen 
to  be  the  need  of  treatment. 

This  principle  does  not  apply  as  yet,  however,  in  the  case  of 
attention  needed  by  the  dependents  of  the  insured.  They  must  pay 
for  their  service;  and,  as  would  be  expected,  the  workers  of  a 
family  go  to  the  doctor  on  the  slightest  provocation,  while  the  non- 
insured  persons  will  wait  until  illness  becomes  serious  and  therefore 
doubly  difficult  to  cure.  Yet  even  here  the  tendency  is  for  the 
insurance  doctor  in  his  home  visits  to  consider  the  troubles  of  other 
members  of  the  family  in  which  situation  the  fee,  while  important, 
is  not  the  primary  consideration.  And  without  a  great  deal  of 
bother  the  visiting  insurance  doctor  can  often  direct  a  non-insured 
sick  person  to  the  service  of  local  doctors  available  under  special 
provisions  for  the  tubercular,  for  maternity  cases,  school  children's 
cases,  etc. 


253 

Decision  as  to  the  eligibility  of  the  insured  for  benefits  in  doubt- 
ful cases  is  now  in  an  unsatisfactory  state,  since  the  standards  of 
different  approved  societies  vary  so  greatly  and  their  method  of 
local  follow-up  are  so  different.  As  it  is,  if  the  approved  society 
doubts  the  validity  of  a  claim  it  usually  sends  its  own  doctor  or 
referee  to  see  the  patient,  advising  the  local  doctor  of  the  step  and 
asking  for  his  help.  This  intervention  is  usually  welcomed  and  the 
necessity  for  a  second  diagnosis  is  so  far  recognized  by  all  that 
thirty  referees  are  now  included  as  salaried  doctors  under  the  act. 
Indeed,  it  is  not  inconceivable  that  the  time  may  come  when  there 
will  be  one  doctor  to  give  medical  advice  and  a  wholly  different  one 
to  authorize  the  certification  for  cash  benefits.  It  is  felt  by  many 
that  there  is  much  to  commend  such  a  separation  of  two  quite 
different  functions. 

It  is  in  fact  difficult  to  tell  in  many  cases  whether  incapacity 
for  work  really  exists.  The  border  line  cases  are  many,  especially 
where  there  is  a  tendency  to  diagnose  illness  as  "  general  debility  " 

and  "  anemia."     In  such  cases  it  will  be  seen  that  there  are  two 

• 

points  of  view  at  work  and  they  perhaps  form  a  wholesome  cor- 
rective to  each  other.  There  is  the  point  of  view  of  the  approved 
society  anxious  to  suspend  payments  as  soon  as  that  can  be  justi- 
fied; and  there  is  the  point  of  view  of  the  insurance  doctor  who 
usually  sees  the  need,  especially  with  "  run  down  "  persons,  of  a 
prolonged  rest  without  worry  and  under  wholesome  conditions.  It 
is  admittedly  hard  to  reconcile  these  points  of  view  where  the  sur- 
rounding conditions,  economic  and  otherwise,  are  constantly  work- 
ing to  negative  the  efforts  of  the  doctor.  Truly  preventive  work 
in  many  cases  requires  more  than  cash  or  medical  benefits.  It 
requires  more  food  and  better-cooked  food,  more  fresh  air,  more 
quiet,  no  worry,  etc.  Failing  these,  cash  benefits  and  bottles  of 
medicine  or  tonic  may  be  poured  out  unceasingly  without  apprecia- 
ble results. 

It  should  be  noted,  in  short,  that  under  any  act  it  will  be  difficult 
in  certain  cases  to  define  when  the  person  is  sick;  and  it  will  be 
necessary  while  giving  medical  service  without  stint  to  use  care 
in  paying  cash  benefits  for  these  border-line  instances  of  incapacity 
or  valetudinarianism. 

This  is,  of  course,  an  aspect  of  the  problems  of  malingering. 
There  is  undoubtedly  some  of  this  kind  of  unconscious  malinger- 
ing which  has  to  be  guarded  against;  and  the  use  of  referees 
under  the  act  is  essential  to  keep  this  at  a  minimum.  It  is  also 
necessary  to  this  end  to  have  the  administration  of  cash  benefits 


254 

in  the  hands  of  a  local  agency  which  can  really  be  in  intimate 
touch  with  the  beneficiaries. 

At  present  there  is  the  further  safeguard  of  weekly  certification 
for  cash  benefits  by  the  doctors  (except  in  chronic  cases  where  the 
approved  society  agrees  to  accept  a  bi-weekly  or  monthly  certifica- 
tion). 

Apart  from  these  comparatively  exceptional  border-line  cases, 
the  amount  of  deliberate  malingering  is  agreed  by  all  to  be 
negligible.  Indeed,  as  a  problem  of  practical  administration,  it  has 
hardly  to  be  reckoned  with. 

4.  Extension  of  Medical  Benefits 

The  Government  health  insurance  budget  of  1914  contained 
estimates  for  the  services  under  the  act  of  referees,  consultants 
and  nurses.  It  is  therefore  fair  to  say  that,  although  the  war 
prevented  the  addition  of  any  of  these  services,  they  were  con- 
templated as  parts  of  an  adequate  plan.  It  is  probable  that  within 
the  next  year  the  Government  will  again  introduce  plans  to  aid 
in  the  provision  of  hospital  beds,  consultants'  services  and  perhaps 
nurses'  services.  Already  one  of  the  approved  societies  with  a 
membership  of  over  300,000  gives  dental  treatment  free  to  the 
insured. 

There  is  considerable  demand  in  labor  circles  for  the  extension 
of  medical  benefits  to  the  families  of  the  insured.  It  is  recognized 
that  this  would  entail  a  larger  contribution,  but  it  would  be  pro- 
portionately less  than  the  amount  necessary  to  protect  the  men 
alone. 

This  demand  reaches  its  logical  culmination  in  the  stand  of  the 
Labor  Party  for  a  national  medical  service  under  which  medical 
attendance  would  be  available — much  as  education  now  is — for 
anyone  who  wanted  it.  The  distinction  should  be  noted,  however, 
between  a  "  state  medical  service  "  and  a  "  national  medical  service." 
Under  the  former  all  doctors  would  be  full  time  salaried  servants 
of  the  state.  The  advocates  of  such  a  plan  are  naturally  few. 
Under  the  latter  the  state  would  rather  aim  to  build  up  and  provide 
such  medical  service  as  was  needed  to  assure  the  public  health; 
leaving  to  private,  individual  and  voluntary  attention  the  doctors 
and  patients  who  did  not  choose  to  receive  the  benefits  of  the  public 
service,  just  as  now  public  education  is  available  for  all  unless  the 
individual  chooses  to  substitute  a  competent  private  school. 


255 

The  Association  of  Approved  Societies,  including  some  of  the 
largest  friendly  society  and  trade  union  approved  societies  to 
which  belong  some  six  million  insured,  has  also  recently  come 
out  for  nationalizing  the  medical  service  in  the  sense  used  above 
as  the  most  satisfactory  way  of  getting  medical  attention  for  all 
with  as  little  red  tape  as  possible. 

The  doctors  as  represented  by  the  British  Medical  Association 
are  opposed  to  the  idea  of  a  national  medical  service,  although 
they  recognize  and  approve  the  tendency  of  the  state  to  provide 
certain  consulting  and  specialist  services  in  the  hospitals  on  a  salary 
basis  as  well  as  for  the  local  authorities  to  make  the  medical  provi- 
sions which  they  do.6 

It  is,  indeed,  a  fact  which  no  one  in  England  ignores  that  wholly 
apart  from  the  insurance,  there  are  today  several  thousand  whole 
or  part  time  doctors  in  the  salaried  employ  of  one  or  another  gov- 
ernmental body;  and  the  number  is  constantly  increasing.  If  the 
insurance  doctors  are  included  in  this  number  it  would  total  close 
to  18,000  doctors.7  When  applications  were  sought  for  the  thirty 
referees  posts  to  be  rilled  this  summer  there  were  over  1,300  ap- 
plicants; which  certainly  indicates  no  great  reluctance  on  the  part 
of  doctors  to  accept  a  salaried  position  with  the  government. 

6  The  following  quotation  from  an  article  on  "  The  Future  of  the  Medical 
Profession"  in  the  British  Medical  Journal  for  October  19,  1918,  indicates 
quite  typically  a  prevailing  view  among  many  thinking  doctors  as  to  the  types 
of  medical  service  which  they  would  like  to  see  available : 

"What,  then,  should  be  the  profession's  constructive  policy?  In  formu- 
lating this  it  were  well  shortly  to  consider  the  basis,  or  bases,  on  which  the 
profession  renders  service  to  the  community  at  present,  and  these  services 
can  be  classified  under  four  heads,  according  as  they  are  rendered,  under  con- 
ditions of: 

1.  Salaried  service,  whole  time  or  part  time — for  example,  public  health 
appointments,   tuberculosis   appointments,    school    medical   appointments,    etc. 
(military  medical  services  are  not  under  consideration).    These  are  conditions 
of  "  State  Medical  Service." 

2.  Part  time   contract   service — for    example,    national   health   insurance 
work. 

3.  Voluntary  service — for  example,  work  done  at  charitable  hospitals. 

4.  Individual  service — for  example,  private  practice.    This  can  be  divided 
into  two  heads,  according  as  it  deals  with  (a)  general  work,  (b)  consultant 
and  specialist  work." 

7 "  The  majority  of  the  medical  profession  in  Great  Britain  is  engaged  in 
either  whole-time  or  part-time  service  for  the  state  or  for  local  authorities. 
Of  the  24,000  medical  practitioners  in  England  and  Wales,  some  5,000  are 
engaged  as  poor-law  doctors,  some  4,000  or  5,000  in  the  public  health  service, 
possibly  500  in  the  lunacy  service,  some  1,300  in  the  school  medical  service, 
and  smaller  numbers  in  various  other  forms  of  medical  service  for  the  state. 
This  is  exclusive  of  the  general  practitioners  who  undertake  contract  work 
under  the  National  Insurance  Act,  and  who  cannot  fall  far  short  of  three- 
fourths  of  the  total  membership  of  the  profession.  It  should  be  noted  that 
many  doctors  held  several  appointments."— Public  Health  and  Insurance,  by 
Sir  Arthur  Newsholme,  page  83. 


256 

There  is  also  an  association  of  about  500  doctors  actively  in 
favor  of  a  national  medical  service. 

These  facts  are  dwelt  upon  at  length  because  this  particular 
problem  is  significant  for  America  as  illustrating  how  a  situation 
was  not  fully  faced  at  the  outset.  Whether  Great  Britain  was 
to  have  an  insurance  plan  for  dealing  with  health  or  a  public 
health  program  supplemented  by  cash  benefits,  does  not  appear 
to  have  been  candidly  considered  by  the  initiators  of  the  legisla- 
tion. As  a  result,  the  experiments  have  conclusively  shown  the 
need  for  making  whatever  medical  provisions  are  offered  uni- 
versally available  without  regard  to  the  industrial  status  of  the 
citizen,  his  income  limit,  or  his  standing  in  a  scheme  of  cash 
subventions. 

In  solving  this  problem  serious  consideration  has  to  be  given 
to  the  attitude  of  the  medical  profession  itself.  Its  co-operation 
is  manifestly  essential  to  any  plan  the  community  decides  to 
undertake.  But  that  co-operation  can  so  easily  extend  over  into 
dictation  that  the  experience  of  England  is  a  useful  warning. 
The  outstanding  features  of  any  plan  to  be  adopted  should  be 
offered  to  the  medical  profession  for  an  opinion  and  for  sug- 
gestion as  to  ways  and  means.  But  it  will  be  a  serious  mistake 
to  allow  those  who  are  accustomed  to  think  that  they  "  have  a 
vested  interest  in  ill  health,"  to  dictate  how  much  or  how  little 
medical  service  the  community  shall  provide  for  itself  on  a  public 
and  universal  basis.  On  that  matter  of  fundamental  policy  which 
is  really  the  first  problem  to  be  faced  in  working  out  a  plan  for 
health  insurance  or  other  public  health  provisions,  the  doctors' 
advice  should  not  be  final,  as  they  are  likely  to  have  a  too 
ex  parte  view.  It  is  true  of  the  doctor's  relation  to  the  state, 
as  of  the  relation  of  other  professional  experts,  that  when  basic 
policies  are  being  determined  "  the  expert  should  be  on  tap 
but  not  on  top." 

Contrary  to  the  usual  impression  in  America,  however,  the 
doctors  are  not  today  opposed  to  the  British  act.  Quite  the 
opposite  is  the  fact.  They  realize  and  state  freely  that  "  the 
doctors  are  better  off  under  the  act  than  they  were  before.  They 
have  an  assured  regular  income  and  no  bother  with  collections." 
As  one  doctor  in  a  peculiarly  influential  position  said :  "  The 
doctors  could  not  be  pried  loose  from  the  act  with  a  crowbar." 
Such  remarks  should  not  be  taken  to  mean  that  doctors  feel  that 
they  have  a  sinecure  under  the  act.  But  it  has  brought  a  degree 
of  economic  independence  in  the  profession,  which  is  unprece- 


257 

dented,  and  has  served  as  a  spur  to  better  workmanship  and  to 
the  enlistment  in  the  profession  of  more  young  men  and  women 
than  the  medical  schools  have  ever  before  had.  The  fact  that 
the  doctors  have  a  small  organization  which  is  actually  a  trade 
union,  and  another  large  and  powerful  body  which  is  to  all 
intents  and  purposes  a  professional  union,  and  that  both  of  these 
organizations  represent  the  doctors  in  collective  bargaining  with 
the  government,  should  not  lead  to  the  conclusion  that  there 
is  an  absence  of  co-operation  in  these  official  relations.  This 
fact  does,  however,  point  strikingly  to  the  importance  of  having 
groups  of  officials  both  in  the  actual  governmental  administra- 
tion and  in  the  local  areas  strong  enough  to  carry  on  the  inevita- 
ble bargaining  process  in  a  way  calculated  to  assure  that  the 
rights  of  the  tax  payer  (that  is,  everyone)  and  of  the  patient  are 
protected. 

In  saying  that  the  doctors  are  today  favorable  to  the  act  we  do 
not,  however,  ignore  the  opposition  which  exists  especially  to  cer- 
tain details  of  the  present  administration.  The  greater  part  of  the 
practitioner's  contact  with  the  Government  comes  through  his  rela- 
tions with  the  local  insurance  committee  (upon  which  the  doctors 
have  of  course  at  least  three  representatives).  And  it  is  inevitably 
true  that  varying  standards  and  regulations  should  be  set  by  these 
committees.  This  may  give  rise  to  legitimate  annoyance  as  may 
also  the  regulations  which  may  be  imposed  from  the  office  of  the 
central  administration  in  the  Ministry  of  Health.  But  it  would  be 
wrong  to  think  that  such  regulations  are  imposed  without  oppor- 
tunity for  conference.  There  is  a  National  Advisory  Committee 
upon  which  the  doctors  are  represented  which  considers  just  such 
matters  as  these  . 

Moreover,  when  all  is  said,  two  facts  have  to  be  remembered: 
Some  degree  of  oversight  of  the  work  of  the  individual  doctor 
is  surely  in  the  public  interest;  it  is  only  important  to  be  sure 
that  it  is  an  oversight  exercised  reasonably  and  tactfully.  And, 
secondly,  the  English  doctor  does  not  have  to  become  an  in- 
surance doctor  unless  he  so  elects.  And  even  when  he  does,  his 
private  practice  is  still  open  to  him  to  any  extent  which  his  strength 
enables  him  to  carry  it.  His  panel  practice,  however,  need  be  as 
large  and  no  larger  than  he  desires,  since  he  does  not  have  to  take 
an  insured  person  upon  his  list  unless  he  wishes  to.  Over  14,000 
doctors  did  not  willingly  "  subjugate  themselves  to  the  state  "  or  to 
the  insurance  patients,  nor  would  they  if  the  relationship  was  irk- 
some, continue  so  to  do  for  eight  years.  The  fact  is  that  once  the 


258 

arrangement  was  entered  into  the  doctors  did  not  on  the  whole  find 
it  onerous,  unduly  inquisitorial  or  destructive  of  their  freedom.  As 
pointed  out  in  the  footnote  on  page  255,  they  recognize  the  need  for 
a  variety  of  types  of  medical  service,  all  of  which  should  be  avail- 
able both  to  the  public  and  to  the  individual  doctor  who  is  choosing 
a  congenial  type  of  professional  activity. 

Medical  opposition  to  the  health  insurance  idea  in  our  own 
country  fastens  to  some  extent  on  the  idea  that  the  "  contract "  with 
the  Government  involves  an  ignominious,  subordinate  and  undignified 
relationship  of  the  doctor  to  the  rest  of  the  community.  Nothing  is 
further  from  the  truth  if  the  British  experience  can  be  taken  as 
proof.  It  is,  of  course,  true  that  when  this  contractual  relation- 
ship is  established  many  points  have  to  be  made  explicit  which  as 
between  the  doctor  and  the  private  patient  have  been  largely  implicit. 
But  to  this  no  conscientious  physician  can  have  of  in  England  does 
have  objection.  For  example,  the  contract  requires  that  the  physi- 
cian's services  shall  be  available  under  the  following  terms : 

"A  practitioner  is  required  to  attend  and  treat  at  the  places,  on  the 
days  and  at  the  hours  to  be  arranged  to  the  satisfaction  of  the  Committee, 
any  patient  who  attends  there  for  that  purpose,  but  he  may  with  the  consent 
of  the  Committee,  which  shall  not  be  unreasonably  withheld,  alter  the  places, 
days,  or  hours  of  his  attendance,  or  any  'of  them,  and  shall  in  that  event 
take  such  steps  as  the  Committee  considers  necessary  to  bring  the  alteration 
to  the  notice  of  his  patients."8 

In  this  as  in  its  other  provisions  it  is  fair  to  say  that  the 
contract  is  only  laying  down  for  all  practitioners  a  standard  of 
professional  obligation  which  all  good  doctors  already  adhere  to. 
Indeed,  to  that  extent  and  in  this  respect  the  act  has  unquestionably 
leveled  up  the  standard  of  medical  service  which  is  given  in  Eng- 
land; and  to  this  there  can  certainly  be  no  honest  objection. 

In  short,  the  contract  is  a  necessary  device  for  defining  the  extent 
to  which  the  Government  and  the  insured  patient  may  call  upon  the 
doctor  in  return  for  a  prescribed  sum.  That  this  should  lower  the 
dignity  of  the  doctor's  status  is  no  more  thought  of  today  in  Eng- 
land than  it  would  be  thought  of  in  any  way  compromising  to  pro- 
fessional integrity  to  take  the  oaths  of  allegiance,  etc.,  necessary  to 
becoming  an  army  doctor. 

5.  Administration  of  Cash  Benefits 

The  cash  benefit  is  administered  through  the  approved  societies, 
except  in  the  case  of  the  300,000  "  post  office  contributors,"  who 

8  Manchester  Insurance  Committee — Terms  of  Service  for  Insurance  Prac- 
titioners, January  31,  1920. 


259 

may  collect  through  the  local  post  offices  benefits  to  the  amount  of 
their  contributions. 

A  brief  explanation  of  the  machinery  will  serve  to  show  the  part 
played  by  these  societies.  They  are  the  official  carriers.  A  worker 
must  join  one  of  them  (or  become  a  deposit  contributor  at  the  post 
office).  He  then  receives  from  his  society  a  stamp  card,  which  he 
gives  to  his  employer  to  stamp  as  evidence  of  payment  by  him  of 
contributions  for  himself  and  his  employees.  These  stamp  cards, 
one  for  each  six  months,  are  returned  to  the  worker  at  the  end 
of  the  half  yearly  period ;  who  in  turn  sends  his  card  to  his  approved 
spciety,  which  credits  him  with  the  payment  and  presents  the  cards 
to  the  Government  as  evidence  of  the  collection. 

When  the  worker  wants  cash  benefits  he  gets  his  medical  certifi- 
cate of  illness  from  his  doctor,  and  sends  it  along  to  the  approved 
society,  usually  by  presenting  it  locally  to  an  agent,  who  forwards 
the  claims. 

Since  the  approved  societies  are  organized  in  different  ways — 
some  in  local  lodges,  some  in  central  organizations  with  merely  local 
agents —  the  promptness  with  which  claims  are  settled,  the  standard 
of  eligibility  for  benefit,  and  the  thoroughness  with  which  a  local 
visitor  investigates  each  case,  in  addition  to  forwarding  the  doctor's 
certificates  to  the  central  office,  vary  greatly. 

Moreover,  since  each  worker  may  join  any  approved  society  he 
wishes,  it  is  not  unusual  to  find  in  one  shop  workers  who  belong  to 
from  twenty-five  to  fifty  different  approved  societies.  It  is  the  mul- 
tiplicity of  societies  which  makes  it  necessary  and  convenient  to  use 
the  stamped  cards  as  evidence  of  payment.  And  when  it  comes  to 
payment  of  benefits,  this  multiplicity  may  make  it  necessary  for  the 
agents  and  sick  visitors  of  a  great  number  of  approved  societies  to  be 
visiting  in  the  course  of  one  day  in  the  same  street  or  even  in  the 
same  house. 

The  frightful  waste  to  which  this  overlapping  leads  is  at  once 
apparent.  So  important  a  feature  of  the  act  are  these  approved 
societies,  however,  that  further  discussion  of  them  is  postponed  to 
a  separate  section. 

As  already  intimated,  the  diversity  of  standards  set  up  by  the 
approved  societies  means  that  some  societies  are  making  every  effort 
to  curtail  payments  while  others  are  giving  benefits  almost  without 
question.  The  element  of  control  which  is  counted  on  by  the  central 
governmental  authority  to  keep  the  payment  of  benefits  within  rea- 
sonable limits  is  provided  by  considering  each  society's  finances 


260 

autonomously.  The  act  provides  that  the  surplus  of  any  society 
(as  determined  by  the  government  valuation  taken  every  five  years) 
shall  be  available  for  increased  benefits  for  the  members  of  that 
society.  These  increased  benefits  may  be  in  the  form  of  either  cash 
or  medical  benefits.  Whether  or  not  this  provision  has  acted  as 
an  effectual  check  upon  liberality  of  payments,  is  doubtful.  For 
the  government,  although  careful  in  its  inspection,  has  on  the  other 
hand  made  special  and  additional  financial  provisions  for  societies 
which  become  insolvent. 

Another  provision  relating  to  the  control  of  approved  societies' 
administrative  expenses  says  that  if  they  go  above  5  shillings  per 
person  per  year  there  shall  be  an  assessment  upon  the  members  of 
that  fund  or  their  benefits  may  be  correspondingly  reduced. 

There  has  been  some  criticism  on  the  score  of  delay  in  payment 
of  cash  benefits.  There  is  undoubtedly  some  ground  for  this  com- 
plaint, although  here  again  much  of  the  criticism  can  be  explained 
in  terms  of  the  disorganized  clerical  staffs  of  the  approved  societies 
during  the  war  (e.  g.,  one  large  society  lost  100  men  clerks  the  day 
war  was  declared).  Or,  in  the  second  place,  delay  in  settlement  is 
frequently  to  be  explained  because  of  some  irregularity  in  the  pre- 
sentation of  the  claim  for  which  the  approved  society  is  not  respon- 
sible. Here  again  the  machinery  of  the  stamp  cards  causes  con- 
fusion, as  for  example,  when  the  worker  unwittingly  gives  his  card 
to  the  agent  of  a  society  to  which  he  does  not  belong  and  the  card 
is  put  aside  by  the  agent  or  lost  in  the  offices  of  his  company. 

In  general,  however,  the  largest  carriers,  especially  the 
friendly  and  big1  trade  union  societies,  pride  themselves  upon  the 
efficiency  of  their  office  organization  and  the  promptness  with 
which  claims  are  paid.  It  was  the  usual  thing  in  a  number  of  the 
societies  visited,  to  have  all  the  claims  received  in  a  morning's 
mail  handled  and  dispatched  the  same  day.  Testimony  is  gen- 
eral, however,  that  the  commercial  companies  which  are  acting 
as  approved  societies  are  the  least  satisfactory  carriers  from  the 
point  of  view  of  prompt  payment — due  perhaps  less  to  intention 
than  to  the  fact  that  the  health  insurance  is  only  incidental  to 
their  profit-making  business. 

It  may  be  said,  in  short,  that  most  of  the  administrative  difficulties 
surrounding  the  present  method  of  paying  cash  benefits  are  not 
inherent  parts  of  a  soundly-organized  insurance  plan,  but  they  are 
inherent  parts  of  a  method  of  paying  through  approved  societies 


261 

such  as  England  felt  compelled  to  resort  to  because  of  the  strength 
of  the  commercial  insurance  companies  and  friendly  societies. 

6.  Administration   of  Medical   Benefits 

Because  it  seemed  expedient  to  work  the  cash  payments  through 
approved  societies  and  because  they  had  available  no  adequate 
administrative  machinery  for  the  provision  of  medical  treatment,  it 
was  necessary  for  England  to  set  up  separate  machinery  for  the 
administration  of  medical  benefits.  The  country  was  therefore 
divided  into  about  150  local  areas,  in  each  of  which  an  insurance 
committee  was  created,  the  membership  of  which  is  representative 
of  the  different  interested  groups.  This  insurance  committee  makes 
the  contracts  with  the  local  doctors  who  are  to  serve  in  that  area. 
It  also  decides  how  many  insured  persons  may  be  on  the  list  of  any 
one  insurance  doctor,  although  a  maximum  of  3,000  persons  has 
now  been  set  by  the  Government.  This  committee,  moreover, 
handles  the  transfers  of  insured  persons  from  the  list  of  one  doctor 
to  another ;  receives  and  deals  with  complaints  against  the  insurance 
doctors;  makes  the  payments  to  the  doctors;  and  makes  arrange- 
ment with  local  druggists  for  the  provision  of  drugs. 

The  means  at  the  disposal  of  these  committees  for  dealing  with 
inferior  or  inadequate  medical  service  are  by  no  means  completely 
satisfactory,  but  are  being  constantly  improved.  The  limitations 
of  the  size  of  the  panels  is  universally  felt  to  be  desirable,  as  is  also 
the  use  of  official  referees,  who  will  now  necessarily  work  in  close 
conjunction  with  insurance  committees. 

Actual  formal  complaints  against  insurance  doctors  by  insured 
persons  are  remarkably  rare,  due  perhaps  rather  to  the  cumbersome- 
ness  of  the  machinery  and  the  difficulty  of  proving  a  case,  than  to  the 
absence  of  criticism.  And  it  frequently  works  out  in  practice  that 
the  insured  persons  complain  to  the  approved  society  with  which 
they  feel  on  better  terms  than  to  the  insurance  committee;  and  the 
approved  society  then  handles  the  complaint  if  it  is  serious.  If  the 
insurance  committee  finds  that  there  are  grounds  for  the  complaints 
which  it  receives,  it  may  discipline  the  doctor  in  any  one  of  several 
ways,  the  most  drastic  of  which  is  to  cancel  his  contract. 

In  such  a  case,  however,  the  doctor  has  the  right  to  appeal  to  a 
disinterested  local  body  composed  of  three  medical  men  and  a  bar- 
rister as  chairman. 

To  safeguard  the  interests  of  the  insured  person  who  would 
assure  himself  of  satisfactory  medical  service,  the  following 
methods  are  provided:  He  has  free  choice  of  doctors;  the 


262 

chance  periodically  to  change  his  doctor ;  and  the  right  to  com- 
plain to  an  authority, — the  local  insurance  committee. 

In  practice,  the  first  provision — free  choice  of  doctors — means 
today  as  much,  if  not  more,  actual  freedom  in  selection  than 
obtained  before  the  act  was  passed.  For  in  the  great  majority  of 
cases  those  doctors  who  were  already  practicing  in  industrial  or 
agricultural  centers  became  insurance  doctors.  And  in  some  dis- 
tricts the  assurance  of  a  fixed  income  from  insurance  practice  has 
meant  that  additional  doctors  have  been  attracted  there  to  practice. 

The  clamor  for  "  free  choice  of  doctors  "  was  not  one,  however, 
which  was  or  is  raised  by  the  patients,  although  it  goes  without 
saying  that  the  most  successful  medical  work  depends  upon  a  condi- 
tion of  personal  confidence  between  doctor  and  patient.  But  there  is 
very  much  less  interest  on  the  part  of  the  insured  persons  in  exercis- 
ing a  free  choice  than  was  anticipated.  The  great  problem  has, 
indeed,  been  to  get  workers  to  indicate  a  preference  for  some  doctor, 
in  order  that  they  may  be  assigned  to  a  place  on  that  doctor's  list. 
It  is  a  further  consideration  that  the  free  choice  may  take  place  on 
a  capricious  basis.  Mention  was  frequently  made  of  cases  where  a 
popular  doctor  on  a  convenient  corner  had  larger  panels  than  he 
could  handle  properly,  while  better  doctors,  who  were  less  genial  or 
lived  on  a  side  street,  had  less  to  do  than  they  could  take  care  of. 

Once  the  insured  person  is  on  a  given  doctor's  list  and  finds  the 
medical  service  unsatisfactory  (even  though  there  may  not  be  suffi- 
cient ground  for  official  complaint),  he  may  apply  for  transfer  to  the 
list  of  another  doctor.  Such  transfer  may  take  place  at  th'j  end  of 
any  six  months'  period;  or,  if  the  original  insurance  doctor  also 
signs  the  application,  the  insured  may  transfer  at  once.  Manifestly, 
however,  the  latter  condition  is  difficult  to  fulfill ;  and  the  former  is 
resorted  to  in  surprisingly  few  cases. 

7.  Payment  of  Doctors 

The  basis  for  the  payment  of  doctors  is  11  shillings  ($2.75) 
per  insured  person  per  year  to  which  in  the  rural  areas  are 
added  mileage  fees  for  distances  of  over  two  miles  to  the 
patients'  homes.  A  doctor  with  a  thousand  persons  on  his  list 
would  thus  have  an  assured  income  of  about  $2,750.  (This 
would  mean  over  $3,000  if  considered  from  the  point  of  view  of 
the  comparative  purchasing  power  of  money  in  England  and 
in  America)  to  which  would  be  added  his  fees  for  private  prac- 
tice. It  is  admitted  by  doctors  and  affirmed  by  all  observers 
that  the  doctors  are  thus  better  off  under  the  act  than  they  ever 


263 

were  before.  They  do  not  have  to  worry  about  collecting  fees 
from  panel  patients;  they  get  their  insurance  income  at  regular 
intervals  of  three  months ;  they  are  virtually  guaranteed  an  income 
dependent  upon  the  size  of  the  panel.  Now  that  the  practice  of 
doctors  working  in  partnership  with  several  colleagues  is  being 
extended,  the  time  on  duty  is  being  divided  up  in  a  way  to  make 
the  amount  of  work  necessary  to  earn  a  comfortable  living  exceed- 
ingly reasonable,  leaving  time  for  study  and  recreation. 

Some  trouble  still  arises  about  the  number  and  identity  of 
insured  persons  on  a  doctor's  list  but  difficulties  on  that  score 
are  being  reduced.  The  doctor  is  paid  on  the  basis  of  a  list 
made  up'  in  advance,  and  if  there  are  transfers  or  movement  of 
persons  an  adjustment  is  effected  at  the  end  of  the  period.  Here 
again  it  seems  true  that  doctors  are  on  the  whole  less  particular 
than  they  used  to  be  about  being  sure  that  the  patients  whom  they 
treat  are  on  their  own  panel.  If  the  visitor  to  a  doctor's  office 
needs  attention  he  is  likely  to  get  it;  or  he  is  sent  where  he  can 
get  it. 

The  present  so-called  capitation  basis  of  payment  has  the  effect 
of  making  it  an  object  for  the  doctor  to  keep  his  insured  patients 
well  and  of  getting  them  well  as  quickly  as  possible.  Of  course, 
there  is  also  possible  the  view  that  since  the  fee  is  assured  the 
service  will  not  be  so  good.  Undoubtedly,  instances  to  illustrate 
both  tendencies  could  be  cited.  But  on  the  whole  it  is  agreed  that 
the  capitation  basis  is  the  most  satisfactory. 

In  Manchester  and  Sal  ford,  the  doctors  originally  objected  to 
the  capitation  plan  and  a  basis  of  payment  for  services  rendered 
was  adopted.  A  similar  plan  started  in  four  other  localities  has 
been  dropped.  The  plan  provides  a  scale  of  fees  for  different  types 
of  visit  and  a  full  record  by  the  insurance  doctor  of  services  ren- 
dered by  him.  The  records  pass  through  the  hands  of  a  committee 
of  doctors  to  see  that  there  has  not  been  excessive  visitation  and 
the  payments  are  then  made.  The  total  fund  from  which  payment 
comes,  however,  is  determined  on  the  capitation  basis ;  that  is,  it  is 
as  many  times  11  shillings  as  there  are  insured  persons  in  the 
entire  district;  so  that  no  doctor  gets  more  in  the  long  run  than 
he  would  in  any  other  district — unless  he  happens  to  be  working 
in  an  area  where  the  rate  of  sickness  is  constantly  excessive.  Since 
the  total  resources  are  thus  limited,  it  has  thus  far  under  the  visita- 
tion basis  been  necessary  at  every  settlement  to  discount  the  doc- 
tors' claims  for  remuneration.  The  result  naturally  is  that  the  good 
doctors  who  find  their  bills  discounted  because  their  colleagues  have 


264 

been  doing  too  much  visiting  and  are  thus  making  large  claims, 
inquire  into  the  type  of  medical  service  being  rendered.  Whether 
the  reason  for  this  discounting  of  claims  is  that  the  scale  of  fees 
for  the  several  services  is  high  or  that  the  doctors  do  too  much 
visiting,  it  is  impossible  to  say.  The  doctors  themselves,  however, 
and  others  in  the  Manchester  district,  believe  in  the  system  and 
say  that  it  works  to  satisfaction.  It  has  the  good  result,  they  con- 
tend, of  paying  for  work  done  and  thus  encouraging  good  work 
where  it  is  needed.  Not  the  size  of  the  panel,  but  the  rate  of  sick- 
ness should  in  this  view  determine  the  payment. 

The  capitation  basis,  however,  is  clearly  the  simpler  of  the 
two;  requiring  less  check  and  oversight,  and  giving  the  benefit  of 
a  guaranteed  amount  of  income  and  of  freedom  to  give  all  the 
medical  attention  necessary  without  thought  of  seeming  to  "  over- 
visit."  And  in  the  last  analysis  the  kind  of  medical  attendance 
given  is  determined  more  by  the  education  and  morale  of  the  pro- 
fession than  by  the  method  of  compensation. 

The  English  experience  in  administering  medical  benefits 
thus  confirms  the  case  for  (1)  local  administration  of  the  medical 
service;  (2)  for  a  uniform  basis  for  contracts  with  the  local 
doctors  in  all  districts;  (3)  for  a  uniform  basis  for  certification 
as  to  physical  condition  justifying  cash  benefits ;  (4)  for  medical 
referees;  (5)  for  co-operative  use  of  local  diagnostic  clinics. 

8.  Drugs 

A  prescribed  number  of  drugs  and  medical  appliances  are  avail- 
able free  on  prescription  from  the  insurance  doctor.  These  pre- 
scriptions when  filled  are  forwarded  to  the  insurance  committees 
who  make  the  payments  to  the  local  chemists  whom  they  have  ap- 
pointed to  fill  the  insurance  prescriptions,  on  the  basis  of  charges 
which  have  been  agreed  to  between  the  Government  and  the  national 
pharmaceutical  organization. 

In  the  event  that  a  doctor  is  found  to  be  giving  too  many  pre- 
scriptions or  those  calling  for  too  expensive  drugs  for  which  equally 
good  but  cheaper  substitutes  are  available,  he  may  be  brought  before 
a  committee  of  doctors  to  explain  his  conduct. 

In  practice,  however,  the  administration  of  the  drug  provisions 
of  the  act  gives  rise  to  little  difficulty  and  is  considered  to  be  run- 
ning smoothly.  Criticism  under  this  head — as  with  the  other  fea- 
tures of  the  act — fastens  rather  upon  the  small  number  of  items 
and  appliances  made  freely  available  to  the  insured  as  their 
statutory  right. 


265 

9.  Approved  Societies 

The  use  of  the  approved  societies  as  carriers  of  the  cash 
benefits  has  been  an  expedient  but  in  many  ways  unfortunate 
procedure.  Certainly  no  other  country  seeing  the  extra  expense, 
duplication  and  over-lapping  caused  by  the  present  system  should 
think  of  resorting  to  this  method  of  handling  the  cash  benefits. 

There  are  now  over  900  approved  societies  and  there  were  at 
one  time  over  2,000,  many  of  which  have  been  consolidated  with 
other  funds. 

Each  society,  of  course,  has  its  own  central  office,  its  own  local 
agents  and. sick  visitors.  Accounts  must  be  kept  for  it  separately 
in  the  Government  offices  and  there  must  be  individual  supervision 
of  their  activities.  Some  societies  select  their  risks;  others  admit 
every  applicant.  There  is  comparatively  little  segregation  of  risks 
by  occupation  and  no  segregation  by  residence.  The  statistics 
which  would  show  the  incidence  of  sickness  by  occupation  and 
locality  are  thus  especially  difficult  to  get. 

In  short,  the  whole  approved  society  machinery  is  a  fine  example 
of  what  to  avoid. 

Indeed,  there  are  not  lacking  signs  that  the  English  themselves 
would  be  glad  to  be  rid  of  them  and  to  administer  the  insurance 
through  one  national  fund.  The  valuation  of  approved  societies 
which  is  now  nearing  completion  will  undoubtedly  reveal  wide  dif- 
ferences in  the  amount  of  surplus  which  will  be  available  for  in- 
creased benefits  in  the  several  societies.  If  it  comes  about  that  some 
of  the  strongest  commercial  companies  and  friendly  societies  are 
in  a  position  to  offer  larger  benefits  than  many  of  the  other  societies, 
there  will  undoubtedly  be  considerable  objection  from  the  trade 
unions.  And  it  is  openly  hinted  even  in  official  quarters  that  in  the 
event  of  such  a  wide  discrepancy  being  revealed,  the  agitation  for 
one  national  fund  as  the  carrier  would  be  very  active. 

Certainly  the  warning  was  again  and  again  repeated  to  us :  "  If 
you  go  in  for  health  insurance,  don't  have  anything  to  do  with 
approved  societies." 

10.  Hospitals 

As  already  stated,  no  hospital  treatment  is  given  under  the  act. 
The  doctor  who  wants  his  patient  to  have  institutional  care  must 
get  him  into  a  voluntary  hospital.  Of  late  years  this  has  been  in- 
creasingly difficult  because  of  a  shortage  of  beds  and  now  also 
because  the  hospitals  are  financially  embarrassed.  Costs  have  more 


266 

than  doubled,  former  contributors  are  now  taxed  so  heavily  that 
they  do  not  give ;  contributors  from  among  the  "  new  rich  "  have 
not  yet  materialized.  As  one  advocate  of  privately  supported  hos- 
pitals naively  remarked  to  us :  "  We  expect  that  in  another  ten 
or  twelve  years  the  new  rich  will  get  the  habit  of  giving  and  then 
the  hospitals  will  be  all  right." 

But  meanwhile  frantic  efforts  are  being  made  to  keep  the  hospital 
doors  open  at  all ;  and  those  who  are  planning  the  public  health  pro- 
gram of  the  country,  see  that  a  wholly  new  way  of  meeting  the 
problem  is  essential.  It  is  possible  that  the  Government  will  in  the 
near  future  abolish  the  poor  law  hospitals  and  make  their  beds 
available  for  use  by  the  local  authorities.  It  is  also  possible  that 
the  Government  will  subsidize  the  hospitals  on  the  basis  of  the  num- 
ber of  beds  used  by  insured  patients.  If  some  such  arrangements 
as  this  are  made,  it  will  be  then  necessary  to  take  steps  to  pay  the 
hospital  doctors  who  now  give  their  services ;  as  it  is  clear  and  right 
that  if  the  hospitals  are  to  be  paid  for  their  work  for  the  insured, 
the  consultants  should  be  paid  also. 

This  is  an  admittedly  transitional  time  in  respect  to  hospital  pro- 
visions, and  those  who  are  anxious  to  see  adequate  provision  made 
as  soon  as  possible  with  no  suggestion  of  charity  about  it,  are  advo- 
cating that  the  hospitals  be  operated  as  public  institutions.  This  will 
undoubtedly  come  in  time,  although  the  Minister  of  Health  has 
officially  stated  that  this  is  not  the  present  Government  program. 
Nevertheless  the  trend  is  already  toward  wholly  publicly  supported 
institutions  for  tuberculosis  and  maternity ;  and  a  good  number  of 
municipalities  have  their  own  general  hospitals. 

At  the  end  of  August  of  this  year  (1920),  the  Minister  of  Health 
introduced  a  bill  which  is  likely  to  become  a  law,  which  aims  to 
make  a  beginning  at  public  support  and  control  of  the  hospitals. 
The  proposed  legislation  gives  power  to  county  authorities  to  supply 
and  maintain  hospitals,  to  contribute  to  hospitals,  to  undertake  the 
maintenance  of  any  poor  law  hospitals  in  their  areas,  to  provide 
ambulance  service.  It  also  gives  these  authorities  power  to  raise 
the  necessary  funds. 

The  element  of  national  control  begins  to  enter,  for  contributions 
out  of  county  funds  to  voluntary  agencies  are  only  allowed  "  on 
such  terms  and  conditions  as  may  be  approved  by  the  Minister." 

This  legislation  is  obviously  a  temporary  and  temporizing  manner 
of  dealing  with  the  shortage  of  hospitals,  since  it  puts  the  whole 
financial  burden  on  the  counties  while  making  possible  a  beginning 
of  national  oversight.  Still  further  legislation  from  the  national 


267 

point  of  view  is  thus  needed,  and  is  probably  contemplated  in  con- 
nection with  a  bill  to  transform  the  poor  law  institutions  into  general 
municipal  agencies. 

11.  Tuberculosis 

At  present  provision  is  made  under  the  act  for  the  sanatorium 
treatment  of  insured  persons  having  tuberculosis.  This  arrange- 
ment will  be  discontinued  after  the  year  1920,  not  because  it  is  no 
longer  needed,  but  because  it  is  felt  that  the  local  authorities  can 
handle  this  disease  better  and  more  adequately.  For  then  the  whole 
population  will  be  considered  at  once  from  the  point  of  view  of 
institutional  care  of  tuberculosis,  rather  than  be  treated  in  two 
groups — the  insured  and  the  non-insured.  Domiciliary  treatment 
for  this  disease  remains,  however,  the  duty  of  the  insurance  doctor. 

Admittedly  the  present  provisions  are  too  few ;  almost  every  in- 
surance committe  has  a  waiting  list  for  sanatorium  treatment.  To 
pass  on  to  the  local  authorities  the  work  of  maintaining  all  the  sana- 
torium beds  necessary  for  tuberculosis  will,  therefore,  not  solve  the 
problem.  As  was  said  above  with  relation  to  general  hospitals,  it 
will  be  necessary  in  the  immediate  future  for  the  Ministry  of  Health 
in  conjunction  with  the  local  authorities,  to  adopt  a  policy  which 
will  really  promise  to  cope  with  this  enormous  problem. 

Interesting  experiments  are  being  made  in  the  organizing  of  self- 
supporting  farm  colonies  for  tuberculosis  patients  who  have  had 
sanatorium  treatment  but  who  will  be  much  safer  and  healthier  if 
they  do  not  immediately  return  to  the  cities.  One  of  these  colonies 
just  out  of  Cambridge  in  Cambridgeshire  may  be  mentioned  as 
deserving  additional  study  at  the  hands  of  those  in  this  country 
who  are  carrying  on  the  community's  attack  on  this  scourge. 

12.  Nursing 

No  nursing  services  are  provided  under  the  act  although  as 
already  pointed  out  they  were  contemplated  in  1914;  and  will  in  all 
probability  sooner  or  later  be  added.  The  nursing  situation,  like 
that  of  the  hospitals,  is  admittedly  unsatisfactory  and  in  a  transi- 
tional state. 

Nursing  services  are  now  provided  by  "  local  authorities  in  con- 
nection with  Tuberculosis  and  Infant  Welfare,  by  Parish  Councils 
for  the  supervision  of  children  under  the  Children  Act,  by  Educa- 
tion Authorities  in  following  up  the  recommendations  as  to  treat- 
ment made  by  School  Medical  Officers,  and  by  various  voluntary 
agencies.  With  such  a  plethora  of  authorities  it  is  to  be  expected 


268 

that  it  will  frequently  occur  that  two  or  more  nurses  will  at  one  and 
the  same  time  be  visiting  the  same  family."9 

It  will  thus  be  seen  that  some  districts  are  adequately  staffed 
while  others  are  not ;  and  that  there  is  needed  a  proper  coordination 
of  national  and  local  policies  which  will  make  universally  available 
in  a  public  way  the  services  needed. 

13.  Prevention  and  Research 

The  claim  that  health  insurance  means  a  new  awareness  of  the 
value  of  preventive  medicine  has  on  the  whole  been  substantiated 
in  the  experience  of  Great  Britain,  although  the  developments  have 
perhaps  been  in  unforeseen  directions. 

It  may  be  fairly  said  that  the  Ministry  of  Health  which  was 
created  in  1919  grew  not  only  out  of  a  knowledge  of  the  need  for 
co-ordination  of  medical  efforts,  but  also  out  of  the  fact  that  a 
unified  national  health  program  and  administration  was  shown 
to  be  necessary  to  national  vitality  by  the  health  insurance  and 
by  the  army  draft. 

It  is  also  true  that  since  the  insurance  act  was  passed, 
measures  have  been  adopted  for  providing  separately  for 
venereal  disease,  for  tuberculosis,  for  maternity  and  child  welfare. 
How  much  of  a  causal  relation  exists  between  the  needs  revealed 
by  the  insurance  act  and  the  inception  of  these  services,  it  is 
impossible  to  say.  But  it  is  certain  that,  now  health  insurance 
is  a  fact,  there  is  a  new  impetus  and  eagerness  to  attack  the 
hospital,  nursing,  dental  and  sanatorium  problems  on  a  public 
and  fundamental  basis.  It  is  also  true  that  the  demand  for  a 
constructive  policy  worked  out  under  a  national  medical  service  is 
greater  than  it  would  have  been  today  had  there  been  no  insurance 
act.  And  the  doctors  have  certainly  come  a  long  way  toward  their 
new  attitude  regarding  preventive  medicine,  toward  clinical  co- 
operation and  toward  regarding  themselves  as  custodians  of  the 
health  of  the  community  as  well  as  the  curers  of  its  ills.  This 
change  of  outlook,  this  invaluable  educational  process,  can  be 
ascribed  almost  wholly  to  the  experience  they  have  gained  in  work- 
ing the  insurance  act. 

It  is,  moreover,  now  widely  realized  that  the  tuberculosis  as  well 
as  other  sickness  cannot  be  greatly  reduced  until  the  housing  prob- 
lem of  the  country  is  seriously  faced  on  a  large  scale. 

It  was  to  have  been  expected,  however,  that  the  records  of 
sickness  would  reveal  local  problems  and  occupational  exposures 
which  needed  special  attention.  Medical  records  were  required  of 


f  A  Public  Medical  Service,  by  David  McKail  and    William  Jones. 


269 

the  insurance  doctors  until  the  war  when  they  were  abandoned, 
and  only  at  the  present  time  is  attention  being  given  to  devising  a 
record  card  that  will  be  of  value.  For  it  is  admitted  by  all  that  the 
pre-war  records  were  practically  valueless  as  disclosing  the  in- 
cidence and  nature  of  the  country's  sickness. 

In  short,  after  eight  years  of  the  insurance  act,  there  is  not  a 
definite  body  of  knowledge  as  to  which  localities,  trades  or  age 
groups  experience  which  particular  kinds  of  illness.  But  here  again, 
extraordinary  as  this  omission  seems,  it  must  be  remembered  that 
through  five  war  years  the  doctors  who  remained  in  civil  life  hardly 
had  time  to  see  all  the  patients  who  needed  attendance  to  say 
nothing  of  trying!  to  keep  individual  records. 

On  the  side  of  research  the  results,  although  only  indirectly 
attributable  to  the  health  insurance,  have  been  most  valuable.  A 
Medical  Research  Committee  was  organized  at  an  early  date  after 
the  act  was  passed ;  and  during  the  war  that  committee  became 
the  official  research  body  of  the  Government  under  which  worked 
the  Health,  of  Munitions  Workers'  Committee  and  others.  Its  find- 
ings, reported  in  full  in  special  monographs  and  in  its  very  inter- 
esting annual  reports,  have  been  of  great  medical  value;  and  the 
chief  problem,  as  was  pointed  out)  by  the  secretary  of  the  Committee, 
is  to  get  the  information  obtained  by  research  quickly  into  the 
hands  of  all  the  general  practitioners  of  the  land. 

So  important  has  become  the  work  of  this  Committee  that  it 
has  now  become  the  Medical  Research  Council,  removed  from 
under  the  jurisdiction  of  the  Ministry  of  Health  (for  reasons  which 
seem  to  the  outsider  hardly  sufficient),  and  placed  directly  under 
the  Privy  Council. 

On  the  whole,  considering  the  intervening  problems,  the  work 
of  fostering  preventive  measures  and  research  has  gone  well*; 
although  it  is  a  matter  of  great  regret  that  the  original  form  of 
medical  record  keeping  was  not  well  enough  designed  to  be  of  per- 
manent use,  and  that  the  body  of  existent  records  is  so  meager. 

Not  the  least  significant  of  the  preventive  influences  which  have 
been  set  in  motion  are  two  reports,  one  by  Sir  George  Newman, 
Chief  Medical  Officer  of  the  Ministry  of  Health,  on  "  An  Outline 
of  the  Practice  of  Preventive  Medicine;"10  the  other  the  Interim 
Report  of  the  Consultative  Council  on  Medical  and  Allied  Services 
on  the  "  Future  Provisions  of  Medical  and  Allied  Services."11 

~"Cmd.,  363. 

"Cmd.,  693.  This,  and  the  report  referred  to  in  footnote  10,  may  be 
ordered  by  the  code  numbers  given  at  a  nominal  cost  from  H.  M.  Stationery 
Office,  Imperial  House,  Kingsway,  London,  W.  C.  2. 


270 

These  reports  have  had  a  wide  reading  and  are  in  harmony 
on  their  major  recommendation,  although  the  latter  carries  its  con- 
structive proposals  into  greater  detail.  They  emphasize  the  strategic 
place  in  a  national  public  health  program  of : 

1.  The  general  practitioner  as  the  first  and  major  point  of  contact  with 
the  people; 

2.  The  primary   (or  local)    health  center  as  the  unit  of  local  medical 
work  especially  'on  its  diagnostic  and  specialist  side  although  the  members  of 
the  clinic  would  be  largely  local  general  practitioners; 

3.  The  secondary   (or  district)   health    center    with    salaried    specialists 
and   consultants   having   necessary  hospitals   and  laboratories; 

4.  A  number  of  supplementary  services  and  special  hospitals; 

5.  A  better  integration  of  medical  education  with  the  day-by-day  work 
of    the    general    practitioner. 

Their  conclusions  as  to  general  principles  and  as  to  methods  of 
carrying  them  into  practical  effect  seem  to  your  investigators  to  be 
sound  and  to  warrant  the  further  study  of  your  Commission.  Two 
copies  of  each  accompany  this  report. 

14.  Insurance  Finances 

The  sources  of  income  for  the  insurance  expenses  are  the 
following : 

1.  Contributions  of  employers  and  employed. 

2.  Contributions  of  the  State  under  the  act. 

3.  Supplementary  Grants  of  Parliament  for  Women's  Equalization  Fond ; 

and  for  the  Central  Fund. 

4.  Parliamentary  Grants  as  follows: 

a.  Medical  Grants  in  Aid   (under  Act  of  1913). 

b.  Special   Grants  in  Ministry  of  Health  Budget  for  Central 

Administration. 

c.  Special  Grants  for  Expenses  of  Insurance  Committee. 

The  sources  of  expenses  under  the  insurance  act  are  as 
follows : 

1.  Cash  Benefits. 

2.  Doctors'  Fees. 

3.  Administration  Expenses  of 

a.  Approved  Societies. 

b.  Insurance  Committees. 

c.  Central  Administration. 

4.  Drug  Fund 

5.  The  Reserve  Fund 

6.  The  Contingencies  Fund. 

7.  Women's  Equalization  Fund. 

8.  Central  Fund. 


271 

In  explanation  of  the  above  two  paragraphs  it  will  be  useful 
to  describe  those  funds  not  already  explained. 

The  Reserve  Fund  is  set  up  to  enable  the  insurance  fund  to 
pay  for  the  sickness  of  the  older  members.  The  statutory  contrib- 
utions are  based  on  the  sickness  rate  of  16  years  of  age  and  until 
there  has  been  one  complete  generation  contributing  under  the 
act  it  is  necessary  to  create  a  reserve  to  meet  the  increased  incidence 
of  sickness  of  the  older  members  admitted  at  the  start.  The  fund 
is  based  on  a  complete  payment  by  1950. 

The  Contingencies  Fund  is  created  for  every  approved  society 
to  meet  any  extraordinary  demands  that  might  arise. 

The  Women's  Equalization  Fund  is  to  pay  for  the  high  incidence 
of  sickness  of  married  women  workers,  which  the  societies  have 
found  it  necessary  to  provide  for. 

The  Central  Fund  is  to  provide  for  those  cases  where  an  ap- 
proved society  shows  a  heavy  and  extraordinary  deficit. 

The  moneys  available  from  each  contribution  are  divided  as 
follows  for  men : 

Pence 

Sickness  Benefit    3 .02   (per  cap.  per  week) 

Disablement  Benefit   1.11 

Maternity  Benefit    68 

Medical  Benefit   1 .92 

Expenses  of  Administration   94 

Total  7.67—7  2/3  pence. 

To  Benefit  Fund   (including  administration)    7-2/3 

To  Contingencies  Fund  and  Central  Fund   2/3 

To  Redemption  of  Reserve  Fund  Value  1-2/3 

10d.— total  of 
employer  and  employees' 
contribution. 

But  the  expenses  under  the  act,  in  addition  to  requiring  2/9  of 
the  expense  of  benefits  to  be  borne  by  the  state,  necessitate  other 
appropriations. 

The  increased  doctors'  fee  now  makes  necessary  a  special  Ex- 
chequer grant.  The  amount  of  this  grant  in  1919  was  £3,000,000; 
but  the  1920  figure  will  be  considerably  higher. 

The  Women's  Equalization  Fund  comes  from  an  Exchequer 
grant  of  £280,000. 

The  expenses  of  administration  in  the  Ministry  of  Health  come 
(as  far  as  can  be  roughly  estimated  from  the  1920-21  budgets)  to 
something  over  £400,000. 


272 

The  statement  given  below  will  indicate  in  an  approximate 
way  only  the  aggregate  sums  involved  in  the  insurance  plan  for 
the  year  1920. 

APPROXIMATE  BALANCE  SHEET  OF  RECEIPTS  AND  EXPENDITURES  FOR  THE  OPERA- 
TION OF  THE  ACT  (1920)" 


Receipts 

Contributions  of  Em- 
ployers and  Employees 

State  Grant  including 
Supplementary  Grants 
on  Women's  Equaliza- 
tion   

Supplementary  Grant  for 
Medical  Services 
(1919  basis) 

Interest    on     Cash     Re- 


serves 


£29,800,000 


6,900,000 


3,100,000 

2,000,000 

£41,800,000 


Expenses 

Benefits  (cash  and  medi- 
cal)   

Supplementary  Medical 
(1919  basis)  

Central  Administration.. 

Contingencies  Fund 

Reserve  Values  

Reserve  Surplus   


£28,700,000 

3,100,000 
400,000 
1,800,000 
1,500,000 
6,000,000 


£41,500,000 


A  rough  check  of  this  balance  sheet  is  obtained  by  making  a  com- 
parative study  of  the  Estimates  of  1920.  These  show  that  the  expense  of  the 
act  to  the  Government  and  payable  out  of  the  exchequer  is  between  eleven 
and  twelve  million  pounds  for  the  year.  Such  an  amount  added  to  the 
receipts  of  the  act  from  the  contributors  roughly  balances  the  total  expense 
of  the  act. 

Another  sidelight  on  the  cost  of  the  act  was  supplied  by  the 
figures  of  Dr.  Addison,  the  Minister  of  Health,  in  reply  to  a  ques- 
tion in  Parliament  on  July  19,  1920.  He  said  that  since  the  incep- 
tion of  the  act  the  total  cost  was  in  round  numbers  190  million 
pounds.  Of  this  amount  99  million  pounds  had  gone  in  benefits; 
expenses  and  administration  had  taken  25  millions;  and  there  was 
a  balance  in  reserve  of  60  millions. 

About  12  per  cent,  he  said,  of  the  receipts  from  contributions 
went  to  the  approved  societies  for  their  expenses  of  adminis- 
tration. 

As  far  as  it  is  safe  to  draw  any  conclusions  from  the  above 
figures,  they  indicate  that  to  provide  medical  service  for  about 
15  million  people  and  cash  benefits  to  the  amount  of  something 
over  15  million  pounds,  the  yearly  Government  expenditures 
is  about  12  million  pounds  and  the  cash  contributions  of  employer 

"This  statement  aims  to  give  only  the  most  general  approximation  of 
receipts  and  expenses.  It  includes  a  figure  for  the  supplementary  medical 
grant  which  is  probably  much  too  low  owing  to  the  fact  that  the  1920  medical 
oayment  is  at  the  new  rate  of  $2.75  per  insured. 


273 

and  the  workers  are  something  over  29  million  pounds.  And  it 
has  so  far  cost  one  pound  for  administration  for  every  four  pounds 
expended  on  benefits. 

It  would  seem  to  be  fair  to  draw  the  conclusion  that  for  the 
benefit  of  15  million  peoples'  health,  about  205  million  dollars  (in 
terms  of  American  currency)  per  year  is  being  spent;  or  between 
$13  and  $14  per  insured  person  per  year.  If  these  figures  are  at 
all  accurate,  the  total  outlay  appears  large  for  the  benefits  received. 

In  a  careful  study  of  "A  Public  Medical  Service"  (Allen  & 
Unwin),  1919,  made  by  a  Glasgow  doctor  and  the  Clerk  of  the 
Glasgow  Insurance  Committee,  the  case  is  set  forth  with  a  con- 
vincing show  of  accurate  statistics  for  a  truly  public  medical  service 
(cash  benefits  excepted),  which  would  cost  between  12  and  13 
shillings  per  person  per  year — or  a  little  over  $3.  The  additional 
cost  necessary  to  pay  cash  insurance  claims  would  certainly  not 
amount  to  over  $5  (probably  $4  would  be  much  more  nearly  a 
correct  figure  on  the  basis  of  the  amount  of  the  English  benefits)  ; 
making  a  total  cost  of  less  than  $10  per  capita  for  medical  and 
institutional  treatment  available  for  the  entire  population  with 
the  addition  of  cash  benefits  of  the  amount  specified  in  the  British 
act. 

These  figures  are  introduced  as  being  in  no  sense  exact  or  con- 
clusive. But  they  are  believed  to  indicate  that  the  present  methods 
of  an  insurance  scheme  with  duplicating  approved  societies, 
elaborate  doctors'  panels,  government  inspecting  agencies  and  small- 
scale  private  druggists,  create  a  variety  of  channels  for  small  wastes 
and  leakages,  which  in  the  aggregate  amount  to  an  unwarrantedly 
high  expense  for  the  value  received. 

Moreover,  it  is  obvious  that  the  method  of  financing  the 
measure  has  now  departed  (if  indeed  it  ever  was  so  financed) 
from  an  insurance  basis.  Special  funds  are  created  and  new 
costs  are  added  with  no  regard  to  the  amounts  originally  made 
available.  This  is  not  said  in  objection  to  the  present  method 
of  financing  by  supplementary  grants.  But  it  is  a  further  point 
in  the  evidence  that  the  tendency  is  increasingly  away  from  an 
insurance  and  toward  a  public  health  basis  of  finance,  so  that  the 
funds  are  made  available  on  a  basis  of  public  need  rather  than 
solely  on  a  basis  of  joint  contribution  and  a  pooled  risk. 


274 

V.    Conclusions 

THE  general  conclusions  reached  by  your  investigators  were 
somewhat  summarily  stated  at  the  outset.     But  it  may  not 
be  out  of  place  to  consider  finally  some  of  the  more  specific  results 
of  the  British  experience  from  which  America  might  especially 
profit. 

A.  The  application  of  the  insurance  method  to  the  provisions 
of  medical,  hospital  and  nursing  facilities  is  a  clumsy  and  indirect 
way  of  making  sure  that  the  public  health  is  being  fostered  and 
conserved. 

The  tendency  is  a  wise  one  which  brings  a  separation  between 
the  medical  services  which  should  be  universally  available  and  the 
cash  benefits  which  might  remain  on  an  insurance  basis. 

On  the  other  hand,  it  is  undoubtedly  true  that  the  immediate 
expense  to  the  public  treasury  can  be  kept  considerably  reduced 
by  securing  payment  for  the  medical  services  out  of  the  fund 
created  by  the  joint  contributions. 

And  it  is  further  true,  not  only  in  England  but  wherever 
health  insurance  has  been  instituted,  that  the  working  of  the 
insurance  has  supplied  the  great  education  to  all  groups  in  the 
community  but  especially  to  the  doctors,  as  to  the  necessity  for 
a  more  extensive  public  health  program. 

Hence,  as  a  practical  matter,  the  incorporation  of  the  medical 
benefits  into  the  insurance  act  is  probably  a  wise  step  coupled 
with  which  should  be  the  extension  of  these  benefits  under  the 
act  to  all  dependents. 

B.  The  public  health  provisions  of  the  community  should  as 
soon  as  possible  include  the  following: 

Medical  attendance  for  all  sick  members  of  the  community  who 
desire  it  (including  general  practitioner  and  consultant  services)  ; 

Institutional  treatment  including  hospitals,  sanataria  and  con- 
valescent homes ; 

Medicine  and  medical  appliances ; 

Dental  treatment,  nursing ;  and 

All  medical  services  incident  to  maternity. 

These  provisions  should  be  available  on  a  basis  of  joint  state 
and  local  support  with  the  actual  administration  of  the  work  as 
the  responsibility  of  the  local  health  authorities,  who  would  be  so 
organized  or  reorganized  as  to  be  able  to  include  the  above  services 
under  their  care. 

Plans  for  the  relation  of  local  to  district  medical  facilities  have 
been  admirably  worked  out  in  one  or  two  English  counties  and  their 
method  of  organization  suggests  a  model  for  careful  consideration. 


275 

As  illustrative  of  the  method  there  in  use,  the  plan  given  below  lf 
is  valuable: 

1.  The  authority  for  carrying  out  the  scheme  will  be  a  Board 
consisting   of    representatives   of    the    County   Council   and   of   the 
General  Hospitals. 

2.  The  General   Hospital  areas   shall  be  those  shown  on  the 
sketch  plan,  subject  to  such  modifications  as  experience  shall  show 
to  be  necessary. 

3.  In    each    Hospital    area    an    Advisory    Committee    shall    be 
formed  of  members  of  the  Hospital  Staff  and  Medical  Officers  in 
charge  of  the  out-stations,  whose  duties  will  embrace — 

a.  Ensuring  that  all  treatment  given  at  the  out-stations  is 
effective,   and 

b.  Advising  the  Board   of  Representatives  on  all  medical 
matters,     including    all     difficulties     arising    in    connection 
therewith. 

4.  The  situation  of  the  out-stations  shall  be  as  shown  on  the  plan 
and  where  practicable   shall  be  established  in  connection  with  the 
Cottage  Hospitals.     They  will  be  opened  in  the  order  decided  by  the 
amount  of  work  likely  to  be  done  at  each  and  will  be  arranged  to 
meet  the  circumstances  of  each  particular  area,  being  larger  and  more 
completely  equipped  in  the  denser  localities  than  in  the  more  scattered 
areas. 

5.  The    out-stations    will    be    provided    and    equipped    by    the 
County  Council. 

6.  The  uses  of  the  out-stations  are  primarily  for  examination 
and  out-patient  treatment  in   connection  with — 

a.  Venereal  Diseases, 

b.  Tuberculosis, 

c.  Ex-service    Men, 

d.  School  Children, 

e.  Maternity   and  Child   Welfare, 

for  which  provision  has  been  made  at  the  public  expense.  They 
will  also  be  available  for  other  conditions  for  which  provision 
may  be  made  in  the  future,  and  may  be  used  by  the  Medical  Officers 
for  insured  persons  and  general  hospital  cases,  by  arrangements 
with  the  County  Council. 

7.  The  Staff  will  be— 

a.  Medical 

•  (1)  A  regular  staff  consisting  of  local  practitioners 
appointed  as  medical  officers  by  the  Board  of  Repre- 
sentatives. 

(2)  A  consultant  staff  consisting  of — 

(a)  Visiting   Staff  of  the   General   Hospital. 

(b)  The   Tuberculosis  and  Venereal  Disease 

Officer  of  the  County  Council. 

b.  Nursing 

(1)  District  Nurse 

"Report  of  County  Medical  Officer  on  Health  to  Gloucestershire  County 
Council,  June  4,  1919. 


276 

(2)  Masseur  and  Masseuse  ) 

(3)  V.    D.    Orderly    and    Nurse  (  peripatetic 

8.  The  Out-stations  will  be  'opened — 

a.  Weekly  at  a  convenient  hour,  on  a  fixed  day,  for  atten- 
dance by  the  medical  officer,  or  oftener  if  necessary   for 
the  work  of  the  County  Council. 

b.  Periodically,  for  attention  by  members  of  the  Visiting 
Staff,  and  by  the  Tuberculosis  and  Venereal  Disease  Officer, 
by  arrangement. 

c.  As  often  as  may  be  necessary  for  intermediate  treat- 
ment by  the  Nursing  Staff. 

d.  At  such    other    times     for    the     convenience    of    the 
Medical  Officer  in  seeing  his  own  patients  and  hospital  cases, 
by  arrangement  with  the  County  Council. 

9.  A  register  shall  be  kept  of  all  attendance  in  a  book    provided 
for  the  purpose,  and  a  case  file  kept  for  each  case  containing  such 
simple  notes  as  may  be  necessary  for  the  medical  history  of  the 
patient. 

It  should  be  pointed  out  that  such  proposals  as  these  do  not 
involve  the  idea  of  a  universally  state-employed  medical  service. 
Your  investigators  believe  that  the  idea  of  such  a  service  is  repug- 
nant to  the  great  majority  of  physicians  and  patients,  and  that  the 
best  results,  at  least  for  some  time  to  come,  are  obtainable  in  other 
ways.  For  example,  the  general  practitioner  who  is  to  be  available 
to  give  public  medical  service  to  any  comer,  would  (as  now)  go  upon 
the  Government's  list  and  have  assigned  to  his  care  those  families 
who  elected  to  have  him  as  their  physician.  He  would  then  be  paid 
on  a  capitation  basis.  If  any  individual  feels  that  he  would  get 
better  service  by  going  to  a  doctor  who  is  not  on  the  public  list, 
or  by  paying  a  public  practitioner  in  his  other  capacity  as  a  private 
doctor  for  the  service  he  gets,  he  is  at  liberty  to  elect  either  of 
these  alternatives.  And  the  doctor  meanwhile  has  whatever  spur 
is  provided  both  by  the  opportunity  of  getting  on  in  the  public 
service  or  of  making  good  in  private  practice. 

In  short,  there  would  be  necessary  the  employment  on  full 
or  part  time  (as  at  present  with  the  insurance  doctors)  by  the 
public  health  authorities  of  a  constantly  increasing  number  of 
general  practitioners  and  specialists,  thus  accelerating  an  exist- 
ent tendency.  But  there  would  still  be  the  widest  possible  lati- 
tude for  those  persons  who  chose  to  secure  their  own  medical 
and  institutional  care,  and  for  those  doctors  who  preferred  on 
whole  or  part  time,  to  carry  on  private  practice. 

Moreover,  the  existence  side  by  side  of  a  considerable  amount 
of  both  public  and  private  practice  would  undoubtedly  react  whole- 
somely on  each,  keeping  initiative,  energy,  professional  ambition  and 
a  spirit  of  public  service  alive  and  growing. 


277 

In  short,  the  medical  benefits  under  an  act  should  be  as 
liberal  as  possible,  including  the  maximum  of  institutional  pro- 
visions as  well  as  general  practictioners'  care,  and  all  treatment 
should  be  carefully  co-ordinated  to  bring  into  effective  use  for 
the  insured  and  his  dependents  all  local  and  all  state  facilities. 

C.  Having  made  medical  provision  available  for  all  insured  and 
their  dependents,  it  would  still  be  necessary  to  make  provision  on  a 
compulsory  insurance  basis  for  payment  of  cash  benefits  to  workers 
when  they  are  unable  to  work  and  secure  wages. 

All  employed  persons  should  be  required  to  insure  in  a  state 
fund  out  of  which  cash  benefits  would  be  paid  during  incapacity 
due  to  illness'. 

D.  Cash  benefits  should  be  at  least  50  per  cent  of  wages. 

E.  The  administration  of  cash  benefits  should  be  decentralized 
on  the  disbursement  side  on  a  geographical  basis,  but  centralized  on 
the  collection  side,  so  that  the  Fund  would  be  pooled  and  the  risk 
distributed  over  an  entire  state.    Benefits  should  be  paid  through  a 
local  agency,  which  would  be  in  the  control  of  representatives  of  the 
affected  groups. 

F.  The  cash  maternity  benefit  should  not  be  administered  on 
an  insurance  basis,  but  should  be  universally  available  and  should  be 
of  an  amount  to  cover  fully  the  expenses  of  confinement.    There  is 
much  to  be  said  for  a  policy  which  makes  of  this  benefit  a  maternity 
endowment  of  an  even  more  substantial  amount. 

Medical  service  should  be  freely  available  for  all  maternity  cases. 


It  is  recognized  that  these  conclusions  may  seem  to  your  Com- 
mission to  extend  into  a  larger  field  than  that  of  the  immediate 
inquiry.  They  are,  however,  the  conclusions  to  which  your  investi- 
gators were  led  in  an  honest  and  wholly  unprejudiced  effort  to 
discover  the  good  and  the  bad  in  the  English  act,  from  the  point  of 
view  of  its  furtherance  of  the  public  health  and  from  the  point  of 
view  of  its  availability  for  American  uses. 

It  may,  of  course,  be  necessary  for  each  separate  community 
to  make  the  same  social  experiments  and  learn  by  the  same 
mistakes.  It  is  to  be  hoped,  however,  that  this  is  not  true ;  that 
it  is  possible  for  one  community  to  build  upon  the  experience  of 
another.  And  the  experience  proves,  as  your  investigators  read 
the  evidence,  that  the  acute  necessity  for  greatly  developing  the 
public  medical  facilities  of  the  state  should  be  recognized,  and 
set  apart  from  and  in  addition  to  any  insurance  provisions.  The 
two  are  not  mutually  exclusive.  They  are  supplementary.  But 


278 

the  proper  and  wise  development  of  the  public  health  services  will 
and  should  modify  the  kind  of  insurance  plan  which  is  adopted. 

Your  investigators  recognize  fully  the  painful  fact  that  those 
forces  which  have  for  various  reasons  been  in  opposition  to  the 
introduction  of  health  insurance  into  America,  have  taken  the 
line  that  "  prevention  "  rather  than  insurance  is  the  method  to 
pursue.  Where  this  position  was  simply  taken  to  delay  matters 
and  "  preventive "  was  simply  a  plausible  cant  phrase  with 
which  to  oppose  any  governmental  action,  the  opposition  has  of 
course  been  sinister  to  a  degree. 

But  this  fact  should,  nevertheless,  not  be  allowed  to  lead  to  a 
slighting  of  the  immediate  value  and  need  of  aggressively  preventive 
work.  Hence,  if  we  are  to  meet  that  opposition  most  effectively 
we  might  well  take  up  the  slogan: 

Medical  and  institutional  service  freely  available  for 
all  employed  persons  and  for  their  families,  with  cash 
benefits  for  physically  incapacitated  workers  out  of  a 
fund  created  by  joint  contributions,  and  with  the 
strengthening  and  co-ordinating  of  the  federal,  state 
and  local  public  health  activities  on  behalf  of  children, 
mothers,  the  subnormal  and  abnormal,  the  aged  and  N 
those  suffering  from  all  infectious  diseases. 

It  is  not  a  question  of  prevention  or  insurance.  It  is — when  all 
elements  in  the  problem  are  faced  at  once — a  question  of  assuring 
simultaneously  adequate  medical  service,  prevention  and  cash  sub- 
vention. And  there  is  no  good  reason  why  these  three  aspects  of 
a  public  program  should  not  be  developed  together.  Certainly  to 
allow  the  advocacy  of  one  to  be  used  as  a  basis  for  opposition  to 
another  is  unscientific  and  short-sighted. 

This  report  will  certainly  be  construed  wrongly  if  it  is  taken  to 
be  unfavorable  to  health  insurance  in  general  or  to  the  British  act  in 
particular.  It  aims  rather  to  give  a  discriminating  statement  of  the 
extent  to  which  insurance  has  been  able  to  carry  out  the  original 
promises  and  purposes  of  its  proponents. 

The  British  Health  Insurance  Act  has  been  a  distinctly  for- 
ward step  in  social  legislation.  It  is,  however,  to  be  hoped  that 
your  Commission  will  see  its  way  clear  to  favoring  a  program 
at  once  more  thorough-going,  far-reaching,  economical  and 
scientific,  which  will,  however,  include  an  application  of  the 
insurance  idea  in  its  legitimate  sphere. 


279 


Appendix 


Persons  Interviewed  in  Course  of  Inquiry  into 
British  Health  Insurance 


Mr.  W.  A.  APPLETON,  secretary,  General  Federation  of  Trades  Unions;  Mr.  JOHN 
BAKER,  secretary,  Iron  &  Steel  Trades  Confederation;  Mr.  BARLOW,  assistant  secretary, 
Workers'  Union;  Dr.  ETHEL  BENTHAM,  panel  doctor,  London,  Member  Labour  Party 
Committee  on  Public  Health;  Mr.  GEORGE  P.  BLIZARD,  insurance  expert  (former  secretary, 
Labour  Party  Committee  on  Public  Health) ;  Miss  MARGARET  G.  BONDFIELD,  secretary. 
National  Federation  of  Women  Workers;  Mr.  G.  A.  STUART-BUNNING,  secretary,  National 
Federation  of  Sub-Post  Masters;  Mr.  G.  W.  CANTOR,  insurance  executive  of  Union  of 
Post  Office  Workers;  Mr.  A.  S.  COLE,  Peek,  Frean  &  Co.,  Ltd.,  London;  Dr.  ALFRED  Cox, 
secretary,  British  Medical  Association;  Mr.  WM.  CRAMP,  assistant  secretary,  National 
Union  of  Railwaymen;  Mr.  G.  W.  P.  EPPS,  Government  Actuary's  Office;  Dr.  LETITIA 
D.  FAIRFIELD,  medical  officer  of  London  County  Council;  Sir  WALTER  M.  FLETCHER, 
secretary,  Medical  Research  Council;  Mr.  THOMAS  FOSTER,  building  trades  employer, 
Bromley,  Lancashire;  Mr.  I.  G.  GIBBON,  administrative  official  in  Ministry  of  Health; 
Mr.  E.  HACKFORTH,  administrative  official  in  Ministry  of  Health;  Mr.  R.  W.  HARRIS, 
administrative  official  in  Ministry  of  Health;  Mr.  FRANK  HODGES,  secretary,  Miners' 
Federation  of  Great  Britain;  Mr.  D.  J.  JENKINS,  insurance  executive,  Iron  &  Steel  Work- 
ers, Approved  Society;  secretary,  Association  of  Approved  Societies;  Miss  ELEANOR  T. 
KELLY,  employment  manager,  Debenham  &  Co.;  Dr.  WM.  KERR,  medical  officer  of  London 
County  Council;  Mr.  F.  KERSHAW,  insurance  executive,  National  Federation  of  Women 
Workers;  Mr.  JAMES  P.  LEWIS,  executive  officer,  Hearts  of  Oak  Benefit  Society;  Mr.  E. 
J.  LIDBETTER,  Bethnal  Green  Poor  Law  Union;  Mr.  THOMAS  LILLY,  clerk,  Manchester 
Insurance  Committee;  Mr.  MCFARLANE,  divisional  inspector,  National  Health  Insurance, 
Manchester  District;  Sir  CHARLES  MACARA,  cotton  manufacturer,  Manchester;  Mr.  A.  B. 
MACLACHLAN,  administrative  official  in  Ministry  of  Health;  Mr.  J.  S.  MIDDLETON,  assistant 
secretary,  British  Labour  Party;  Mr.  MILLER,  insurance  executive,  Workers'  Union; 
Miss  MURBY,  inspecting  staff,  National  Health  Insurance;  Sir  THOMAS  NEILL,  president, 
National  Amalgamated  Approved  Society;  Dr.  CHARLES  A.  PARKER,  consulting  physician; 
Dr.  MARIAN  PHILLIPS,  women's  organizer  of  Labour  Party;  Mr.  CHARLES  G.  RENOLD, 
firm  of  Hans  Renold  &  Co.,  Manchester;  Dr.  HARRY  ROBERTS,  panel  doctor,  London;  Dr. 
MEREDITH  ROBERTS,  administrative  official  in  Ministry  of  Health;  Mr.  D.  A.  RUSHTON, 
editor,  National  Insurance  Gazette;  Mr.  SAMUEL  SANDERSON,  secretary,  Insurance  Section, 
Amalgamated  Association  Card,  Blowing  and  Ring  Room  Operatives;  Mr.  SHARP,  Harrods' 
Department  Store,  London;  Mr.  ROBERT  SMITH,  insurance  executive,  Cooperative  Whole- 
sale Society  Approved  Society;  Mr.  H.  O.  STUTCHBURY,  administrative  official  in  Ministry 
of  Health;  Mr.  FRED  THOMAS,  Amalgamated  Weavers'  Association;  Mr.  JOHN  TURNER, 
secretary,  National  Amalgamated  Union  of  Shop  Assistants;  Miss  WARD,  inspecting  staff, 
National  Health  Insurance  Dept.;  Mr.  WARREN,  insurance  executive,  National  Amalga- 
mated Union  of  Shop  Assistants;  Sir  ALFRED  W.  WATSON,  government  actuary;  Mr.  & 
Mrs.  SIDNEY  WEBB,  economists,  members  1909  Poor  Law  Commission;  Dr.  A.  WELPLEY, 
secretary,  Medico-Political  Union;  Dr.  J.  S.  WHITAKER,  administrative  official  in  Ministry 
of  Health;  Mr.  H.  L.  WOOLCOMBE,  secretary,  London  Charity  Organization  Society. 


280 


PUBLICATIONS 

American  Association  for  Labor  Legislation 


No.    1:     Proceedings  of  the  First  Annual  Meeting,  1907. 

No.    2:     Proceedings  of  the  Second  Annual  Meeting,  1908.* 

No.    3:     Report  of  the  General  Administrative  Council,  1909.* 

No.    4:     (Legislative  Review  No.  1)  Review  of  Labor  Legislation  of  1909. 

No.    5:     (Legislative  Review  No.  2)  Industrial  Education,  1909. 

No.    6:     (Legislative  Review  No.  3)  Administration  of  Labor  Laws,  1909.* 

No.    7:     (Legislative  Review  No.  4)  Woman's  Work,  1909.* 

No.    8:     (Legislative  Review  No.  5)  Child  Labor,  1910. 

No.    9:     Proceedings  of  the  Third  Annual  Meeting,  1909. 

No.  10:     Proceedings   of    the    First    National    Conference   on    Industrial    Dis- 
eases, 1910.* 

No.  11:     (Legislative  Review  No.  6)  Review  of  Labor  Legislation  of  1910. 

No.  12:     '(American   Labor   Legislation   Review,  Vol.  I,   No.    1.)     Proceedings 
of  the  Fourth  Annual  Meeting,  1910. 

No.  13:     (American    Labor    Legislation    Review,    Vol.    I,    No.    2.)     Comfort) 
Health  and  Safety  in  Factories. 

No.  14:     (American   Labor   Legislation   Review,   Vol.    I,    No.   3.)     Review   of 
Labor  Legislation  of  1911. 

No.  15:     (American  Labor  Legislation   Review,   Vol.   I,   No.  4.)     Prevention 
and  Reporting  of  Industrial  Injuries. 

No.  16:     (American    Labor    Legislation    Review,    Vol.    II,    No.    1.)     Proceed- 
ings of  the  Fifth  Annual  Meeting,  1911.* 

No.  17:     (American  Labor  Legislation  Review,  Vol.  II,  No.  2.)     Proceedings 
of  the  Second   National  Conference  on   Industrial    Diseases,    1912. 

No.  18:     (American    Labor    Legislation    Review,    Vol.   II,  No.  3.)  Review  of 
Labor  Legislation  of  1912. 

No.  19:     (American  Labor  Legislation  Review,  Vol.  II,  No.  4  )     Immediate 
Legislative  Program. 

No.  20:     (American   Labor  Legislation   Review,   Vol.    Ill,   No.    1.)     Proceed 
ings  of  the  Sixth  Annual  Meeting,  1912.* 

No.  21:     (American   Labor  Legislation   Review,   Vol.   Ill,   No.   2.)     Proceed- 
ings of  the  First  American  Conference  on  Social  Insurance,   1913. 

No.  22:     (American    Labor    Legislation    Review,    Vol.    Ill,    No.    3.)     Review 
of  Labor  Legislation  of  1913. 

No.  23:     (American   Labor   Legislation   Review,   Vol.    Ill,   No.   4.)     Adminis- 
tration of  Labor  Laws. 

No.  24:     (American  Labor  Legislation  Review,  Vol.  IV,  No.  1.)     Proceedings 
of  the  Seventh  Annual  Meeting,  1913. 

No.  25:     (American    Labor   Legislation    Review,    Vol.    IV,    No.    2.)     Proceed- 
ings of  the  First  National  Conference  on  Unemployment,  1914. 

No.  26:     (American    Labor    Legislation    Review,    Vol.    IV,    No.    3.)     Review 
of  Labor  Legislation  of  1914. 

No.  27:     (American    Labor   Legislation    Review,    Vol.    IV,    No.    4.)     Associa- 
tion Activities. 

No.  28:     (American  Labor  Legislation  Review,  Vol.  V,  No.   1.)     Proceedings 
of  the  Eighth  Annual  Meeting,  1914. 

No.  29:     (American  Labor  Legislation  Review,  Vol.  V,  No.  2.)     Proceedings 
of  the  Second  National  Conference  on  Unemployment,  1914. 

*Publication  out  of  print. 


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UNIVERSITY  OF  CALIFORNIA  LIBRARY 


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desu        3    *ork,     It  is 
should  be  forehanded  tn 
such   measures  as  will  prevent  any  such 
suffering." 


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